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Federal R eserve Bank
of
DALLAS
R OB ERT D. McTEER, JR.
PRESIDENT
AND CHIEF EXEC UTIVE OFFICER
DALLAS, T E X A S
7 5 2 6 5 -5 9 0 6
October 14, 1998
Notice 98-94
TO:
The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
Revised Pamphlet for Regulation B;
Slip-sheet Amendments to Regulations D, DD, and Y;
and the Capital Adequacy Guidelines
DETAILS
The Board of Governors of the Federal Reserve System has
published a revised pamphlet for Regulation B (Equal Credit
Opportunity), effective April 30, 1998. In addition, the Board has
published slip-sheet amendments to Regulation D (Reserve Re
quirements o f Depository Institutions), Regulation DD (Truth in
Savings), Regulation Y (Bank Holding Companies and Change in
Bank Control), and the Capital Adequacy Guidelines.
ENCLOSURES
The revised pamphlet and the slip-sheet amendments are
enclosed. Please insert them in the appropriate sections of your
Regulations binders.
For additional copies, bankers and others are encouraged to use one of the following toll-free
numbers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333-4460;
El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intra
state (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
-2 -
MORE INFORMATION
For more information regarding Regulation B and Regula
tion DD, please contact Eugene Coy at (214) 922-6201. For more
information regarding Regulation D, please contact this Bank’s
Reserve and Risk Management Division at (214) 922-5646. For
more information regarding Regulation Y, please contact Rob
Jolley at (214) 922-6071. For more information regarding the
Capital Adequacy Guidelines, please contact Dorsey Davis at
(214) 922-6051.
For additional copies of this Bank’s notice, the revised
pamphlet, or the slip-sheet amendments, contact the Public Affairs
Department at (214) 922-5254.
Sincerely yours,
Board of Governors of the Federal Reserve System
Amendments to Regulation D
Reserve Requirements
o f Depository Institutions
May 1998*
1. Effective January 1, 1998, section 204.3
was am ended to read as follow s:
(a) M aintenance and reporting o f re
quired reserves.
(1) Maintenance. A depository institu
tion, a U.S. branch or agency of a for
eign bank, and an Edge or agreement
corporation shall m aintain reserves
against its deposits and Eurocurrency li
abilities in accordance with the proce
dures prescribed in this section and sec
tion 204.4 and the ratios prescribed in
section
204.9.
R eserve-deficiency
charges shall be assessed for deficiencies
in required reserves in accordance with
the provisions of section 204.7. For pur
poses of this part, the obligations of a
majority-owned (50 percent or more)
U.S. subsidiary (except an Edge or
agreement corporation) of a depository
institution shall be regarded as obliga
tions of the parent depository institution.
(2) Reporting.
(i) Every depository institution, U.S.
branch or agency of a foreign bank,
and Edge or agreement corporation
shall file a report of deposits (or any
other required form or statement) di
rectly with the Federal Reserve Bank
o f its District, regardless of the man
ner in which it chooses to maintain
required reserve balances. A foreign
bank’s U.S. branches and agencies
and an Edge or agreement corpora
tion’s offices operating within the
same state and the same Federal Re
serve District shall prepare and file a
report of deposits on an aggregated
basis.
*
A complete Regulation D. as am ended effective July
30. 1998. consists of—
• the regulation pamphlet dated April 1997 (see inside front
cover) and
• this slip sheet.
Item 2 is new. The other items were included in the Janu
ary 1998 slip sheet.
(ii) A Federal Reserve Bank shall
notify the reporting institution of its
reserve requirements. Where a pass
through arrangement exists, the Re
serve Bank will also notify the pass
through
co rresp o n d en t
of
its
re s p o n d e n t’s
req u ired
reserve
balances.
(iii) The Board and the Federal Re
serve Banks will not hold a pass
through correspondent responsible for
guaranteeing the accuracy of the re
ports of deposits submitted by its
respondents.
(3) Allocation o f low reserve tranche
and exemption from resen e require
ments. A depository institution, a for
eign bank, or an Edge or agreement
corporation shall, if possible, assign the
low reserve tranche and reserverequirement exemption prescribed in
section 204.9(a) to only one office or
to a group of offices filing a single
aggregated report o f deposits. The
amount of the reserve-requirement ex
emption allocated to an office or group
of offices may not exceed the amount
of the low reserve tranche allocated to
such office or offices. If the low re
serve tranche or reserve-requirem ent
exemption cannot be fully utilized by a
single office or by a group of offices
filing a single report o f deposits, the
unused portion of the tranche or ex
emption may be assigned to other of
fices or groups of offices of the same
institution until the am ount o f the
tranche (or net transaction accounts) or
exemption (or reservable liabilities) is
exhausted. The tranche or exemption
may be reallocated each year concur
rent with implementation of the in
dexed tranche and exemption, or, if
necessary during the course of the year
to avoid underutilization o f the tranche
or exemption, at the beginning of a
reserve-computation period.
I
Regulation D
(b) Form and location o f reserves.
(1) A depository institution, a U.S.
branch or agency of a foreign bank,
and an Edge or agreement corporation
shall hold reserves in the form o f vault
cash, a balance maintained directly with
the Federal Reserve Bank in the Fed
eral Reserve District in which it is lo
cated, or, in the case of nonmember
institutions, with a pass-through corre
spondent in accordance with section
204.3(i).
(2)(i) For purposes of this section, a
depository institution, a U.S. branch
or agency of a foreign bank, or an
Edge or agreement corporation is lo
cated in the Federal Reserve District
that contains the location specified in
the institution's charter organizing
certificate, or license or, if no such
location is specified, the location of
its head office, unless otherwise de
termined by the Board under para
graph (b)(2)(ii) o f this section.
(ii) If the location specified in para
graph (b)(2)(i) of this section, in the
B oard ’s ju d g m en t, is am biguous,
w ould im pede the ability o f the
Board or the Federal Reserve Banks
to perform their functions under the
Federal Reserve Act, or would im
pede the ability of the institution to
operate efficiently, the Board will de
termine the Federal Reserve District
in which the institution is located,
after consultation with the institution
and the relevant Federal R eserve
Banks. The relevant Federal Reserve
Banks are the Federal Reserve Bank
whose District contains the location
specified in paragraph (b)(2)(i) of
this section and the Federal Reserve
Bank in whose District the institution
is proposed to be located. In making
this determination, the Board will
consider any applicable laws, the
business needs of the institution, the
location of the institution’s head of
fice, the locations where the institu
tion performs its business, and the
locations that would allow the insti
tution, the Board, and the Federal
Reserve Banks to perform their func
tions efficiently and effectively.
*
*
*
*
*
(i) Pass-through rules.
(1) Procedure.
(i) A nonmember depository institu
tion, a U.S. branch or agency of a
foreign bank, or an Edge or agree
ment corporation required to main
tain reserve balances ( “ respondent” )
may select only one institution to
pass through its required reserves,
unless otherwise permitted by Fed
eral Reserve Bank in whose District
the respondent is located. Eligible in
stitutions through which respondent
required reserve balances may be
passed (“ correspondents” ) are Fed
eral Home Loan Banks, the National
Credit Union Administration Central
Liquidity Facility, and depository in
stitutions, U.S. branches or agencies
o f foreign banks, and Edge and
agreement corporations that maintain
required reserve balances at a Fed
eral Reserve office. In addition, the
Board reserves the right to permit
other institutions, on a case-by-case
basis, to serve as pass-through corre
spondents. The correspondent chosen
must subsequently pass through the
required reserve balances of its re
spondents directly to a Federal Re
serve Bank. The correspondent plac
ing funds with a Federal Reserve
Bank on behalf o f respondents will
be responsible for account mainte
nance as described in paragraphs
(i)(2) and (i)(3) o f this section.
(ii) Respondents or correspondents
may institute, terminate, or change
pass-through arrangem ents for the
maintenance o f required reserve bal
ances by providing all documentation
required for the establishment of the
new arrangement or termination of
the existing arrangement to the Fed
eral Reserve Bank involved within
the time period provided for such a
change by those Reserve Banks.
(2) Account maintenance. A correspon-
Regulation D
dent that passes through required re
serve balances o f respondents shall
maintain such balances, along with the
correspondent’s own required reserve
balances (if any), in a single com
mingled account at the Federal Reserve
Bank in whose District the correspon
dent is located, unless otherwise per
mitted by the Reserve Bank. The bal
ances held by the correspondent in an
account at a Reserve Bank are the
property o f the correspondent and rep
resent a liability of the Reserve Bank
solely to the correspondent, regardless
o f whether the funds represent the re
serve balances o f another institution
that have been passed through the
correspondent.
(3) Responsibilities o f parties.
(i) Each individual depository insti
tution is responsible for maintain
ing its required reserve balance either
directly w ith a Federal R eserve
B ank or through a pass-throug h
correspondent.
(ii) A pass-through correspondent
shall be responsible for assuring the
maintenance of the appropriate ag
gregate level of its respondents’ re
quired reserve balances. A Federal
Reserve Bank will compare the total
reserve balance required to be main
tained in each account with the total
actual reserve balance held in such
reserve account for purposes of de
termining required-reserve deficien
cies, imposing or waiving charges for
deficiencies in required reserves, and
for other reserve maintenance pur
poses. A charge for a deficiency in
the aggregate level of the required
reserve balance will be imposed by
the Reserve Bank on the correspon
dent maintaining the account.
(iii) Each correspondent is required
to maintain detailed records for each
o f its respondents in a manner that
permits Reserve Banks to determine
whether the respondent has provided
a sufficient required reserve balance
to the correspondent. A correspon
dent passing through a respondent’s
reserv e b alan ce shall m aintain
records and make such reports as the
Board or Reserve Bank requires in
order to ensure the correspondent’s
compliance with its responsibilities
for the maintenance o f a respondent’s
reserve balance. Such records shall
be available to the Federal Reserve
Banks as required.
(iv) The Federal Reserve Bank may
terminate any pass-through relation
ship in which the correspondent is
deficient in its recordkeep in g or
other responsibilities.
(v) Interest paid on supplemental re
serves (if such reserves are required
under section 204.6) held by a respond
ent will be credited to the account
maintained by the correspondent.
2. Effective July 30, 1998, section 204.3(c)
was am ended to read as follow s:
(c)
Computation o f required reserves fo r
institutions that report on a weekly basis.
(1) Required reserves are computed on
the basis o f daily average balances of
deposits and Eurocurrency liabilities
during a 14-day period ending every
second Monday (the “ computation pe
riod” ). Reserve requirements are com
puted by applying the ratios prescribed
in section 204.9 to the classes of de
posits and Eurocurrency liabilities of
the institution. In determining the re
serve balance that is required to be
maintained with the Federal Reserve,
the average daily vault cash held during
the com putation period is deducted
from the amount of the institution’s re
quired reserves.
(2) The reserve balance that is required
to be maintained with the Federal Re
serve shall be maintained during a 14day period (the “ maintenance period” )
that begins on the third Thursday fol
lowing the end o f a given computation
period.
3. E ffective D ecem ber 16, 1997, section
204.9 was am ended to read as follow s:
3
Regulation D
(a) Reserve percentages. The following
reserve ratios are prescribed for all de
pository institutions. Edge and agreement
corporations, and United States branches
and agencies o f foreign banks:
Category
NET TRANSACTION
ACCOUNTS
$0 to $47.8 million
Over $47.8 million
NONPERSONAL
TIME DEPOSITS
EUROCURRENCY
LIABILITIES
Reserve requirement*
3% of amount
$1,434,000 plus
10% of amount over
$47.8 million
0%
0%
♦B efo re deducting the adjustment to be made by
paragraph (b) o f this section.
4
(b) Exemption from reserve requirements.
Each d epo sito ry in stitu tio n . E dge or
agreement corporation, and U.S. branch or
agency o f a foreign bank is subject to d
zero percent reserve requirement on air
amount of its transaction accounts subject
to the low reserve tranche in paragraph
(a) o f this section not in excess of $4.7
million determined in accordance with
section 204.3(a)(3).
Board of Governors of the Federal Reserve System
Amendments to Regulation DD
Truth in Savings
September 1998*
1. Effective Septem ber 23, 1994, section
230.2(a) is amended by deleting the last
sentence, and section 230.2(h) is amended
by deleting the second sentence.
2. E ffective M arch 21, 1993, section
230.4(c)(1) is amended by extending both
the mandatory compliance date and the
notice requirement date from March 21,
1993, to June 21, 1993.
3. E ffective M arch 21, 1993, section
230.5(a)(2)(H) is amended by deleting the
words "by third parties. ”
4. Effective August 28, 1998, the second sen
tence o f section 2 3 0 .5 (b )(6 )(iii) was
amended to read as follows:
* * * For accounts with a stated matu
rity greater than one year that do not
compound interest on an annual or more
frequent basis, that require payouts at
least annually, and that disclose an APY
determined in accordance with section E
of appendix A of this part. * * *
5. Effective March 21, 1993, section 230.8(e)
is revised to read as follows:
(e) Exemption fo r certain advertisements.
(1) Certain media. If an advertisement
is made through one of the following
media, it need not contain the informa
tion in paragraphs (c)(1), (c)(2), (c)(4).
*
A complete Regulation DD. as am ended effective Au
gust 28. 1998. consists of—
• the pamphlet dated November 1992 (see inside cover)
and
• this slip sheet.
Item 4 and 6 are new. The other items were included in
the July 1995 slip sheet.
(c)(5), (c)(6)(ii), (d)(4), and (d)(5) of
this section:
(i) broadcast or electronic media,
such as television or radio;
(ii) ou tdoor media, such as bill
boards; or
(iii) telephone response machines.
(2) Indoor signs.
(i) Signs inside the premises of a de
pository institution (or the premises
of a deposit broker) are not subject
to paragraphs (b), (c), (d), or (e)(1)
of this section unless they face out
side the premises and can reasonably
be viewed by a consumer only from
outside the premises.
(ii) If a sign exempt by this para
graph states a rate o f return, it
shall—
(A) State the rate as an “ annual
percentage yield,” using that term
or the term "APY.” The sign shall
not state any other rate, except
that the interest rate may be stated
in conjunction with the annual per
centage yield to which it relates.
(B) Contain a statement advising
consumers to contact an employee
for further information about appli
cable fees and terms.
6. Effective August 28, 1998, numbers 1 and
2 o f appendix A, part I, section E. are
amended to read as follows:
1. For time accounts
maturity * * *
with
a stated
Example:
(I) If an institution offers a $1,000 twoyear certificate of deposit that does not
compound and that pays out interest semi
annually by check or transfer at a 6.00
percent interest rate, the annual percent1
Regulation DD
age yield may be disclosed as 6.00
percent.
2. For tim e
this * * *
accounts
covered
by
APY earned = 100
[(1 + 6.50/1,500)1365'301
-H
Example:
(1) If an institution offers a $1,000 threeyear certificate of deposit that does not
compound and that pays out interest an
nually by check or transfer a 5.00 percent
interest rate for the first year, * * *
*
(2) * * *
*
*
*
*
Applied to this example, * * * The sum
of these products, 6,570, is divided by
1,095, the total number of days in the
term. * * *
7. Effective March 21, 1993, appendix A,
part II is amended by adding a new para
graph A heading after the second para
graph; by correcting all fo u r form ulas un
der paragraph A to add on open
parenthesis after the first bracket; and by
adding a new part B after example (3), as
follows:
APY earned = 5.40%
^3) * * *
APY earned = 100
[(1 + 21/2,000)‘3‘ w
- 1]
APY earned = 4.28%
B. Special Formula fo r Use Where
Periodic Statement Is Sent More Often
Than the Period fo r Which Interest Is
Compounded
Institutions that use the daily-balance
method to accrue interest and that issue
periodic statements more often than the
period for which interest is compounded
shall use the following special formula:
APY Earned = 100
{[(1
f
Part II. Annual Percentage Yield
Earned for Periodic Statements
*
*
*
*
*
Interest earned \ \
Balance
/I
Days in period /
\
"1 .^65-Com pounding
Compounding J I
-
1}
The annual percentage yield earned
shall be calculated by using the following
formulas ( “ APY earned” is used for con
venience in the formulas):
The following definition applies for use in
this formula (all other terms are defined
under part II):
A. General Formula
“Compounding” is the number of days in
each compounding period.
APY earned = 100
[(1 + Interest earned/
Balance)*365' ^ 1
- 1]
*
*
*
*
*
Examples:
^ J ^
*
*
*
APY earned = 100
[(1 + 5.25/LOOO)1365'30’
- 1]
APY earned = 6.58%
Assume an institution calculates interest
for the statement period using the dailybalance method, pays a 5.00 percent inter
est rate, compounded annually, and pro
vides periodic statem ents for each
monthly cycle. The account has a daily
balance of $1,000 for a 30-day statement
period. The interest earned is $ 4 .11 for
the period, and the annual percentage
yield earned (using the special formula
above) is 5.00 percent:
Regulation DD
APY Earned
{[1
Amendments to the Truth in Savings Act
will be published in the Regulation DD
pamphlet.
*((§))(-)]
- 1}
APY Earned
5.00%
.1
Board of Governors of the Federal Reserve System
Amendments and Corrections to Regulation Y
Bank Holding Companies
and Change in Bank Control
1998*
1. Section 225.17 is corrected in paragraph
(d)(5) by inserting the word “principal"
between the words “o r ” and “sharehold
ers,” and in paragraph (b)(2) by replacing
the word “th e ” in front o f “shareholders”
with the word "all. ”
2. E ffective N ovem ber 12, 1997, section
225.24(d) was am ended by revising para
graph (2), adding a new paragraph (3),
and renumbering the old paragraphs (3)
and (4) as (4) and (5), respectively, to
read as follow s:
(2) Board action; internal schedule. The
Board seeks to act on every notice re
ferred to it for decision within 60 days of
the date that the notice is filed with the
Reserve Bank. If the Board is unable to
act within this period, the Board shall no
tify the notificant and explain the reasons
and the date by which the Board expects
to act.
(3)(i) Required time limit fo r System ac
tion. The Board or the Reserve Bank
shall act on any notice under this sec
tion within 60 days after the submis
sion o f a complete notice.
(ii) Extension o f required period fo r
action.
(A) In general. The Board may ex
tend the 60-day period required for
B oard a ctio n u n d er p aragrap h
(d)(3)(i) of this section for an addi
tional 30 days upon notice to the
notificant.
(B) Unlisted activities. If a notice in
volves a proposal to engage in an
activity that is not listed in section
225.28, the Board may extend the
period required for Board action un
der paragraph (d)(3)(i) of this section
for an additional 90 days. This 90day extension is in addition to the
30-day extension period provided in
paragraph (d)(3)(ii)(A) o f this sec
tion. The B oard shall notify the
notificant that the notice period has
been extended and explain the rea
sons for the extension.
(4) Requests fo r additional information.
The Board or the Reserve Bank may
modify the information requirements un
der this section or at any time request any
additional information that either believes
is needed for a decision on any notice
under this section.
(5) Tolling o f period. The Board or the
Reserve Bank may at any time extend or
toll the time period for action on a notice
for any period with the consent o f the
notificant.
*
A com plete Regulation Y, as am ended effective N o
vem ber 12, 1997, consists of—
• the regulation pamphlet dated May 1997 (see inside front
cover) and
• this slip sheet.
Item 1 is new. The other item was included in the January
1998 slip sheet.
1
Board of Governors of the Federal Reserve System
Amendments to the Capital Adequacy Guidelines
August 1998*
I. Effective October I, 1998, the risk-based
ca p ita l adequacy guid elin es f o r state
m em ber banks (Regulation H, appendix A)
were am ended in section II.B. to read as
follow s:
*
*
*
*
*
1. Goodwill and other intangible assets
* * *
_
B
b. O ther intangible assets, i. All ser
vicing assets, including servicing
assets on assets other than m ort
gages (i.e.. nonm ortgage-servicing
assets) are included in this appen
dix A as iden tifiable in tang ib le
assets. The only types of identifiable
intangible assets that may be in
cluded in, that is, not deducted from,
a bank’s capital are readily market
able m o rtg ag e-serv icin g a ssets,
nonm ortgage-servicing assets, and
purchased credit-card relationships.
The total am ount of these assets
included in capital, in the aggregate,
cannot exceed 100 percent o f tier
1 cap ital. N o n m o rtg ag e-serv icin g
assets and pu rchased cred it-card
relationships are subject to a separate
sublim it of 25 percent o f tier 1
capital.14
M Amounts o f servicing assets and purchased
credit-card relationships in excess o f these limita
tions. as well as identifiable intangible assets, in
cluding core deposit intangibles, including favor
able leaseholds, are to be deducted from a bank's
core capital elements in determining tier I capital.
However, identifiable intangible assets (other than
m ortgage-ser\ icing assets and purchased creditcard relationships) acquired on or before February
19. 1992. generally will not be deducted from
capital for supervisory purposes, although they will
continue to be deducted for applications purposes.
*
A complete capital adequacy guidelines, as amended
effective O ctober 1. 1998. consists of—
• the capital adequacv guidelines pamphlet dated July 1997
(see inside front cover) and
• this slip sheet.
ii. For purposes of calculating these
limitations on mortgage-servicing as
sets, nonm ortgage-servicing assets,
and purchased credit-card relation
ships, tier 1 capital is defined as the
sum of core capital elements, net of
goodwill, and net of all identifiable
intangible assets other than m ort
gage-servicing assets, nonmortgageserv icin g assets, and purchased
credit-card relationships, regardless
of the date acquired, but prior to the
deduction of deferred-tax assets.
iii. The am ount o f m o rtgage-ser
vicing assets, nonmortgage-servicing
assets, and purchased credit-card re
lationships that a bank may include
in capital shall be the lesser o f 90
percent of their fair value, as deter
mined in accordance with this sec
tion, or 100 percent of their book
value, as adjusted for capital pur
poses in accordance with the instruc
tion in the commercial bank Consoli
d ated R eports o f C o n d itio n and
Income (call reports). If both the ap
plication o f the limits on mortgageservicing assets, nonm o rtgage-ser
vicing assets, and purchased creditcard relationships and the adjustment
of the balance-sheet amount for these
assets would result in an amount be
ing deducted from capital, the bank
would deduct only the greater o f the
two amounts from its core capital el
ements in determining tier 1 capital.
iv. Banks may elect to deduct disal
lowed servicing assets on a basis that
is net o f any associated deferred-tax
liability. Deferred-tax liabilities net
ted in this manner cannot also be
netted against deferred-tax assets
w hen determ ining the am ount of
deferred-tax assets that are dependent
upon future taxable income.
I
Amendments to the Capital Adequacy Guidelines
v. Banks must review the book value
of all intangible assets at least quar
terly and make adjustments to these
values as necessary. The fair value of
mortgage-servicing assets, nonmortgage-servicing assets, and purchased
credit-card relationships also must be
determined at least quarterly. This
determination shall include adjust
ments for any significant changes in
original valuation assum ptions, in
cluding changes in prepayment esti
mates or account attrition rates. Ex
aminers will review both the book
value and the fair value assigned to
these assets, together with support
ing docum entation, during the ex
amination process. In addition, the
Federal Reserve may require, on a
case-by-case basis, an independent
valuatio n o f a b a n k ’s intangible
assets.
*
*
*
*
*
4. D eferred-tax assets. The amount of
deferred-tax assets that is dependent upon
future taxable income, net o f the valua
tion allowance for deferred-tax assets, that
may be included in, that is, not deducted
from, a bank’s capital may not exceed the
lesser of (i) the amount o f these deferredtax assets that the bank is expected to
realize within one year of the calendar
quarter-end date, based on its projections
of future taxable income for that year,20
or (ii) 10 percent of tier 1 capital. The
reported amount o f deferred-tax assets,
net o f any valuation allowance for de
20 To determine the amount o f expected deferredtux assets realizable in the next 12 months, an institu
tion should assume that all existing temporary differ
ences fully reverse as o f the report date. Projected
fu tu re ta x a b le in c o m e sh o u ld not inc lud e net
operating-loss carry-forwards to be used during that
year or the amount o f existing temporary differences a
bank expects to reverse within the year. Such projec
tions should include the estim ated effect o f taxplanning strategies that the organization expects to
im plem ent to realize net operating losses or tax-credit
carry-forwards that would otherwise expire during the
year. Institutions do not have to prepare a new 12month projection each quarter. Rather, on interim re
port dates, institutions may use the future-taxableineo m e p rojectio ns for th e ir c u rren t fiscal year,
adjusted for any significant changes that have oc
curred or are expected to occur.
ferred-tax assets, in excess o f the lesser of
these two amounts is to be deducted from
a bank’s core capital elements in deter
mining tier I capital. For purposes of
culating the 10 percent limitation,
capital is defined as the sum o f cor e capital elements, net o f goodwill, and net of
all other identifiable intangible assets
other than mortgage- and nonmortgageservicing assets and purchased credit-card
re la tio n sh ip s, before any disallo w ed
deferred-tax assets are deducted. There
generally is no limit in tier 1 capital on
the amount o f deferred-tax assets that can
be realized from taxes paid in prior carry
back years or from future reversals of ex
isting taxable temporary differences, but.
for banks that have a parent, this may not
exceed the amount the bank could reason
ably expect its parent to refund.
2. Effective O ctober I, 1998, the tier I le
verage capital standard fo r state member
banks (Regulation H. appendix B) was
a m en ded in sectio n II. b. to read as
follow s:
b. A bank's tier 1 leverage ratio is calcu
lated by dividing its tier 1 capital (the
numerator o f the ratio) by its average to
tal consolidated assets (the denomin
o f the ratio). The ratio will also be ca
lated using period-end assets whenever
necessary, on a case-by-case basis. For
the purpose o f this leverage ratio, the
definition o f tier 1 capital as set forth in
the risk-based capital guidelines contained
in appendix A o f this part will be used.2
2 Tier I capital for state m em ber banks includes
com m on equity, minority interest in the equity ac
counts o f consolidated subsidiaries, and qualifying
noncumulative perpetual preferred stock. In addition,
as a general matter, tier I capital excludes goodwill:
am ounts of mortgage-servicing assets, nonmortgageservicing assets, and purchased credit-card relationshipjN that, in the aggregate, exceed I(X) percent o f tier
I capital: nonmortgage-servicing assets and purchased
credit-card relationships that, in the aggregate, exceed
25 percent o f tier 1 capital: other identifable intan
gible assets: and deferred-tax assets that are dependent
upon future taxable income, net o f their valuation
allowance, in excess o f certain limitations. The Fed
eral Reserve may exclude certain investments in sub
sidiaries or associated companies as appropriate.
Amendments to the Capital Adequacy Guidelines
As a general matter, average total consoli
dated assets are defined as the quarterly
average total assets (defined net of the
allowance for loan and lease losses) re^ ^ 5 o r t e d on the bank’s Reports of Condition
^ ^ a n d Income (call reports), less goodwill;
am ounts o f m ortgage-servicing assets,
nonm ortgage-servicing assets, and pur
chased credit-card relationships that, in
the aggregate, are in excess o f 100 per
cent o f tier 1 capital; amounts of nonmort
g ag e-serv icin g assets and pu rchased
credit-card relationships that, in the aggre
gate, are in excess of 25 percent of tier 1
capital; all other identifiable intangible as
sets; any investments in subsidiaries or
associated companies that the Federal Re
serve determines should be deducted from
tier 1 capital; and deferred-tax assets that
are dependent upon future taxable income,
net of their valuation allowance, in excess
o f the limitation set forth in section II.B.4
o f appendix A o f this part.1
' Deductions from tier t capital and other adjustments are discussed more fully in section II.B. in
appendix A o f this part.
3. Effective October I, 1998, the risk-based
capital a dequacy g u idelin es fo r bank
ih olding companies (Regulation Y, appen\lix A ) were am ended in section II. B. to
read as follow s:
*
*
*
*
*
1. Goodwill and other intangible assets
*
*
*
b. Other intangible assets, i. All ser
vicing assets, including servicing as
sets on assets other than mortgages
(i.e., nonm ortgage-servicing assets)
are included in this appendix A as
identifiable intangible assets. The
only types of identifiable intangible
assets that may be included in. that
is, not deducted from, an organiza
tion’s capital are readily marketable
mortgage-servicing assets, nonmortgage-servicing assets, and purchased
credit-card relationships. The total
amount o f these assets included in
capital, in the aggregate, cannot ex
ceed 100 percent o f tier 1 capital.
N onm ortgage-servicing assets and
purchased credit-card relationships
are subject, in the aggregate, to a
sublim it o f 25 percent o f tier 1
capital.15
ii. For purposes o f calculating these
limitations on mortgage-servicing as
sets, nonm ortgage-servicing assets,
and purchased credit-card relation
ships. tier 1 capital is defined as the
sum of core capital elements, net of
goodwill, and net o f all identifiable
intangible assets and similar assets
other than mortgage-servicing assets,
no nm ortgage-servicing assets, and
purchased credit-card relationships,
regardless o f the date acquired, but
prior to the deduction of deferred-tax
assets.
iii. The am ount o f m ortgage-serv
icing assets, nonm ortgage-servicing
assets, and purchased credit-card re
lationships that a bank holding com
pany may include in capital shall be
the lesser of 90 percent of their fair
value, as determined in accordance
with this section, or 100 percent of
their book value, as adjusted for
capital purposes in accordance with
the instructions to the Consolidated
Financial Statements for Bank Hold
ing Companies (FR Y-9C Report). If
both the application of the limits on
mortgage-servicing assets, nonm ort
gage-servicing assets, and purchased
credit-card relationships and the ad
justment of the balance-sheet amount
for these intangibles would result in
!' Amounts o f mortgage-servicing assets, nonmortgage-servicing assets, and purchased credit-card rela
tionships in excess o f these limitations, as well as all
other identifiable intangible assets, including core de
posit intangibles and favorable leaseholds, are to be
deducted from an organization’s core capital elements
in determining tier 1 capital. However, identifiable
intangible assets (other than mortgage-servicing assets
and purchased credit-card relationships) acquired on
or before February 19. 1992, generally will not be
deducted from capital for supervisory purposes, al
though they will continue to be deducted for applica
tions purposes.
3
Amendments to the Capital Adequacy Guidelines
an amount being deducted from capi
tal. the bank holding company would
deduct only the greater of the two
amounts from its core capital ele
ments in determining tier 1 capital.
iv. Bank holding com panies may
elect to deduct disallowed servicing
assets on a basis that is net of any
asso ciated d eferred -tax liability.
Deferred-tax liabilities netted in this
manner cannot also be netted against
deferred-tax assets when determining
the amount of deferred-tax assets that
are dependent upon future taxable
income.
v. Bank holding companies must re
view the book value of all intangible
assets at least quarterly and make ad
justments to these values as neces
sary. The fair value of mortgageservicing assets, nonmortgage-serv
icing assets, and purchased creditcard relationships also must be deter
mined at least quarterly. This deter
mination shall include adjustments
for any significant changes in origi
nal valuation assumptions, including
changes in prepayment estimates or
account attrition rates. Exam iners
will review both the book value and
the fair value assigned to these as
sets, together with supporting docu
mentation, during the inspection pro
cess. In addition, the Federal Reserve
may require, on a case-by-case basis,
an independent valuation of an orga
nization's intangible assets or similar
assets.
*
*
*
*
*
4. D eferred-lax assets. The amount of
deferred-tax assets that is dependent upon
future taxable income, net of the valua
tion allowance for deferred-tax assets, that
may be included in, that is, not deducted
from, a banking organization's capital
may not exceed the lesser of (i) the
amount of these deferred-tax assets that
the banking organization is expected to
realize within one year of the calendar
quarter-end date, based on its projections
of future taxable income for that year,2'1
or (ii) 10 percent of tier 1 capital. The
reported amount o f deferred-tax assets,
net o f any v alu ation allow ance
deferred-tax assets, in excess o f the l e s f l
of these two amounts is to be deducted
from a banking organization’s core capital
elements in determining tier 1 capital. For
purposes o f calculating the 10 percent
limitation, tier 1 capital is defined as the
sum of core capital elements, net of good
will, and net of all identifiable intangible
assets other than mortgage-servicing as
sets, nonmortgage-servicing assets, and
purchased credit-card relationships, before
any disallowed deferred-tax assets are de
ducted. There generally is no limit in tier
I capital on the amount of deferred-tax
assets that can be realized from taxes paid
in prior carry-back years or from future
reversals of existing taxable temporary
differences.
4. Effective June 30, 1998, the tier 1 leverage
m ea su re f o r b ank h olding co m p a n ies
(Regulation Y, appendix D) was am ended
in section II. a. to read as follow s:
a. The Board has established a minimum
ratio o f tier 1 capital to total assets o f 3.0
percent for strong bank holding co m p j^
nies (rated composite 1 under the B O P ^ J
rating system of bank holding companies)7
and for bank holding companies that have
implemented the Board’s risk-based capi
tal measure for market risk as set forth in
appendixes A and E of this part. For all
To determine the amount o f expected deferredtux assets realizable in the next 12 months, an in
s titu tio n should assum e that all existing te m p o
rary differences fully reverse as o f the report date.
Projected future taxable income should not include net
operating-loss carry-forwards to be used during that
year or the amount o f existing temporary differences a
bank holding com pany expects to reverse within the
>ear. Such projections should include the estimated
effect o f tax-planning strategies that the organization
expects to im plement to realize net operating losses or
tax-credit carry-forwards that would otherwise expire
during the year. Institutions d o not have to prepare a
new 12-month projection each quarter. Rather, on in
terim report dates, institutions may use the futuretaxable-incom e projections for their current fiscal
\ear. adjusted for any significant changes that have
occurred or are expected to occur.
endments to the Capital Adequacy Guidelines
other bank holding companies, the mini
mum ratio of tier 1 capital to total assets
is 4.0 percent. Banking organizations with
supervisory, financial, operational, or
kianagerial weaknesses, as well as organi
zations that are anticipating or experienc
ing significant growth, are expected to
maintain capital ratios well above the
minimum levels. Moreover, higher capital
ratios may be required for any bank hold
ing company if warranted by its particular
circumstances or risk profile. In all cases,
bank holding companies should hold capi
tal commensurate with the level and na
ture o f the risks, including the volume
and severity of problem loans, to which
they are exposed.
(
Effective October I, 1998, the tier I le
verage capital standard fo r bank holding
com panies (Regulation Y, appendix D)
was am ended in section II. b. to read as
follow s:
b. A banking organization’s tier 1 lever
age ratio is calculated by dividing its tier
1 capital (the numerator of the ratio) by
its average total consolidated assets (the
denominator of the ratio). The ratio will
also be calculated using period-end assets
whenever necessary, on a case-by-case ba1s. For the purpose o f this leverage ratio,
the definition o f tier 1 capital as set forth
in the risk-based capital guidelines con
tained in appendix A o f this part will be
used.1 As a general matter, average total
■
' T i e r 1 capital tor hanking organizations includes
com m on equity, minority interest in the equity acContinued
consolidated assets are defined as the
quarterly average total assets (defined net
o f the allow ance for loan and lease
losses) reported on the organ izatio n's
Consolidated Financial Statements (FR
Y-9C Report), less goodwill; amounts of
mortgage-servicing assets, nonmortgageservicing assets, and purchased credit-card
relationships that, in the aggregate, are in
excess o f 100 percent of tier 1 capital;
amounts of nonmortgage-servicing assets
and purchased credit-card relationships
that, in the aggregate, are in excess o f 25
percent of tier 1 capital; all other identifi
able intangible assets; any investments in
subsidiaries or associated companies that
the Federal Reserve determines should be
deducted from tier 1 capital; and deferredtax assets that are dependent upon future
taxable income, net o f their valuation al
lowance, in excess o f the limitation set
forth in section II.B.4 o f appendix A of
this part.4
Continued
counts o f consolidated subsidiaries, qualifying noncumulative perpetual preferred stock, and qualifying c u
mulative perpetual preferred stock. (Cum ulative per
petual preferred stock is limited to 25 percent o f tier
I capital.) In addition, as a general matter, tier I
capital ex c lu d es good w ill; am oun ts o f m ortgageservicing assets, nonm ortgage-servicing assets, and
purchased credit-card relationships that, in the aggre
gate, exceed 100 percent o f tier 1 capital; nonm ort
gage-servicing assets and purchased credit-card rela
tionships that, in the aggregate, exceed 25 percent o f
tier 1 capital; all other identifiable intangible assets;
and deferred-tax assets that are dependent upon future
taxable income, net o f their valuation allow ance, in
excess o f certain limitations. T he Federal Reserve
may exclude certain investments in subsidiaries or
associated com panies as appropriate.
4 D eductions from tier 1 capital and other adjust
ments are discussed more fully in section II.B. in
appendix A o f this part.
5
Board of Governors of the Federal Reserve System
Regulation B
Equal Credit Opportunity
12 CFR 202; as amended effective April 30, 1998
% //a r
Any inquiry relating to Regulation B should be addressed to the Federal Reserve Bank of the
Federal Reserve District in which the inquiry arises.
May 1998
Contents
Page
Section 202.1— Authority, purpose,
scope .............................................................. 1
(a) Authority and scope ........................... 1
(b) Purpose ................................................... 1
Section 202.2— Definitions ........................... 1
Section 202.3— Limited exceptions for
certain classes of transactions ..................4
(a) Public-utilities credit ........................... 4
(b) Securities credit .................................... 4
(c) Incidental credit .................................... 4
(d) Government credit ............................... 5
Section 202.4— General rule prohibiting
discrimination ............................................... 5
Section 202.5— Rules concerning taking
of applications ............................................. 5
(a) Discouraging applications .................. 5
(b) General rules concerning requests
for information ...................................... 5
(c) Information about a spouse or
former spouse ...................................... 5
(d) Other limitations on information
requests ................................................... 5
(e) Written applications ............................. 6
Section 202.5a— Rules on providing
appraisal reports .......................................... 6
(a) Providing appraisals ........................... 6
(b) Credit unions ........................................ 6
(c) Definitions ............................................ 7
Section 202.6— Rules concerning
evaluation of applications ......................... 7
(a) General rule concerning use of
information ............................................. 7
(b) Specific rules concerning use of
information ............................................. 7
(c) State property laws ............................. 8
Section 202.7— Rules concerning
extensions of credit .................................... 8
(a) Individual accounts ............................. 8
(b) Designation of name ........................... 8
(c) Action concerning existing
open-end accounts ............................... 8
(d) Signature o f spouse or other
person ...................................................... 8
(e) Insurance ............................................... 9
Section 202.8— Special-purpose credit
programs ........................................................ 9
(a) Standards for programs ....................... 9
Page
(b) Rules in other section ......................... 9
(c) Special rule concerning requests
and use of information ....................... 9
(d) Special rule in the case of
financial need ...................................... 10
Section 202.9— Notifications ...................... 10
(a) Notification of action taken,
ECOA notice, and statement of
specific reasons .................................. 10
(b) Form of ECOA notice and
statement of specific reasons ......... 11
(c) Incomplete applications .................... 11
(d) Oral notifications by
small-volume creditors .................... 11
(e) Withdrawal o f approved
application ........................................... 11
(f) Multiple applicants ........................... 11
(g) Applications submitted through a
third party ........................................... 11
Section 202.10— Furnishing of credit
information ................................................. 12
(a) Designation o f accounts .................. 12
(b) Routine reports to consumer
reporting agency ............................... 12
(c) Reporting in response to inquiry . . 12
Section 202.11— Relation to state law . . . 12
(a) Inconsistent state l a w s ...................... 12
(b) Preempted provisions of state
law ........................................................ 12
(c) Laws on finance charges, loan
ceilings ................................................. 12
(d) State and federal laws not
affected ................................................. 12
(e) Exemption for state-regulated
tra n sa c tio n s........................................... 12
Section 202.12— Record re te n tio n .............. 13
(a) Retention of prohibited
information ........................................... 13
(b) Preservation of records .................... 13
Section 202.13— Information for
monitoring purposes .................................. 14
(a) Information to be requested ........... 14
(b) Obtaining of information ................ 14
(c) Disclosure to applicant(s) ................ 14
(d) Substitute monitoring program . . . . 14
Section 202.14— Enforcement, penalties,
and liabilities ............................................. 14
Contents
Page
(a) Administrative enforcement ........... 14
(b) Penalties and liabilities .................... 15
(c) Failure of compliance ...................... 15
Section 202.15— Incentives for
self-testing and self-correction ............. 16
(a) General rules ...................................... 16
(b) Self-test defined ................................. 16
(c) Appropriate corrective action ......... 16
(d) ................................................................ 16
Page
Appendix A— Federal enforcement
agencies ....................................................... 17
Appendix B— Model application forms . .
18
Appendix C— Sample notification forms . 29
Appendix D— Issuance of staff
interpretations ............................................ 34
E Q U A L C R E D IT O P P O R T U N IT Y
A C T ............................................................... 35
Regulation B
Equal Credit Opportunity
12 CFR 202; as amended effective April 30, 1998
SE C T IO N 20 2 .1 — Authority, Scope, and
Purpose
(a) Authority and scope. This regulation is is
sued by the Board of Governors of the Fed
eral Reserve System pursuant to title VII
(Equal Credit Opportunity Act) of the Con
sumer Credit Protection Act, as amended (15
USC 1601 et seq.). Except as otherwise pro
vided herein, the regulation applies to all per
sons who are creditors, as defined in section
202.2(1). Information-collection requirements
contained in this regulation have been ap
proved by the Office of Management and
Budget under the provisions of 44 USC 3501
et seq. and have been assigned OMB No.
7100-0201.
(b) Purpose. The purpose of this regulation is
to promote the availability o f credit to all
creditworthy applicants without regard to race,
color, religion, national origin, sex, marital
status, or age (provided the applicant has the
capacity to contract); to the fact that all or
part of the applicant’s income derives from a
public assistance program; or to the fact that
the applicant has in good faith exercised any
right under the Consumer Credit Protection
Act. The regulation prohibits creditor practices
that discriminate on the basis of any of these
factors. The regulation also requires creditors
to notify applicants of action taken on their
applications; to report credit history in the
names o f both spouses on an account; to re
tain records of credit applications; to collect
information about the applicant’s race and
other personal characteristics in applications
for certain dwelling-related loans; and to pro
vide applicants with copies o f appraisal re
ports used in con nection w ith credit
transactions.
SE C T IO N 2 0 2 .2 — D efinitions
For the purposes of this regulation, unless the
context indicates otherwise, the following
definitions apply.
(a) A ccount means an extension o f credit.
When employed in relation to an account, the
word use refers only to open-end credit.
(b) A ct means the Equal Credit Opportunity
Act (title VII of the Consumer Credit Protec
tion Act).
(c) Adverse action.
(1) The term means—
(i) a refusal to grant credit in substan
tially the amount or on substantially the
terms requested in an application unless
the creditor makes a counteroffer (to
grant credit in a different amount or on
other terms) and the applicant uses or
expressly accepts the credit offered;
(ii) a termination of an account or an
unfavorable change in the terms of an
account that does not affect all or a sub
stantial portion of a class of the creditor’s
accounts; or
(iii) a refusal to increase the amount of
credit available to an applicant who has
made an application for an increase.
(2) The term does not include—
(i) a change in the terms of an account
expressly agreed to by an applicant;
(ii) any action or forbearance relating to
an account taken in connection with inac
tivity, default, or delinquency as to that
account;
(iii) a refusal or failure to authorize an
account transaction at a point of sale or
loan, except when the refusal is a termi
nation or an unfavorable change in the
terms of an account that does not affect
all or a substantial portion of a class of
the creditor’s accounts, or when the re
fusal is a denial of an application for an
increase in the amount of credit available
under the account;
(iv) a refusal to extend credit because
applicable law prohibits the creditor from
extending the credit requested; or
(v) a refusal to extend credit because the
creditor does not offer the type of credit
or credit plan requested.
(3) An action that falls within the definition
I
§ 202.2
of both paragraphs (c)(1) and (c)(2) of this
section is governed by paragraph (c)(2).
(d) Age refers only to the age of natural per
sons and means the number of fully elapsed
years from the date of an applicant’s birth.
(e) Applicant means any person who requests
or who has received an extension of credit
from a creditor, and includes any person who
is or may become contractually liable regard
ing an extension of credit. For purposes of
section 202.7(d), the term includes guarantors,
sureties, endorsers and similar parties.
(f) Application means an oral or written re
quest for an extension of credit that is made
in accordance with procedures established by
a creditor for the type of credit requested. The
term does not include the use of an account or
line of credit to obtain an amount of credit
that is within a previously established credit
limit. A completed application means an ap
plication in connection with which a creditor
has received all the information that the credi
tor regularly obtains and considers in evaluat
ing applications for the amount and type of
credit requested (including, but not limited to,
credit reports, any additional information re
quested from the applicant, and any approvals
or reports by governmental agencies or other
persons that are necessary to guarantee, in
sure, or provide security for the credit or col
lateral). The creditor shall exercise reasonable
diligence in obtaining such information.
(g) Business credit refers to extensions of
credit primarily for business or commercial
(including agricultural) purposes, but exclud
ing extensions of credit of the types described
in section 202.3(a), (b), and (d).
(h) Consumer credit means credit extended to
a natural person primarily for personal, family,
or household purposes.
(i) Contractually liable means expressly obli
gated to repay all debts arising on an account
by reason of an agreement to that effect.
(j) Credit means the right granted by a credi
tor to an applicant to defer payment of a debt,
incur debt and defer its payment, or purchase
property or services and d efer paym ent
therefor.
2
Regulation B
(k) Credit card means any card, plate, coupon
book, or other single credit device that may
be used from time to time to obtain money,
property, or services on credit.
(/) Creditor means a person who, in the ordi
nary course of business, regularly participates
in the decision of whether or not to extend
credit. The term includes a creditor’s assignee,
transferee, or subrogee who so participates.
For purposes o f sections 202.4 and 202.5(a),
the term also includes a person who, in the
ordinary course of business, regularly refers
applicants or prospective applicants to credi
tors, or selects or offers to select creditors to
whom requests for credit may be made. A
person is not a creditor regarding any viola
tion of the act or this regulation committed by
another creditor unless the person knew or
had reasonable notice of the act, policy, or
practice that constituted the violation before
becoming involved in the credit transaction.
The term does not include a person whose
only participation in a credit transaction in
volves honoring a credit card.
(m) Credit transaction means every aspect of
an applicant’s dealings with a creditor regard
ing an application for credit or an existing
extension of credit (including, but not limited
to, inform ation requirem ents; investigation
procedures; standards o f creditw orthiness;
terms of credit; furnishing of credit informa
tion; revocation, alteration, or termination of
credit; and collection procedures).
(n) Discriminate against an applicant means
to treat an applicant less favorably than other
applicants.
(o) Elderly means age 62 or older.
(p) Empirically derived and other credit scor
ing systems.
(1) A credit scoring system is a system that
evaluates an applicant’s creditworthiness
mechanically, based on key attributes of the
applicant and aspects of the transaction, and
that determines, alone or in conjunction
with an evaluation of additional information
about the applicant, whether an applicant is
deemed creditworthy. To qualify as an em
pirically derived, demonstrably and statisti
Regulation B
cally sound, credit scoring system, the sys
tem must be—
(i) based on data that are derived from
an em pirical com parison o f sam ple
groups or the population of creditworthy
and noncreditworthy applicants who ap
plied for credit within a reasonable pre
ceding period of time;
(ii) developed for the purpose of evaluat
ing the creditworthiness of applicants
with respect to the legitimate business in
terests of the creditor utilizing the system
(including, but not limited to, minimizing
bad debt losses and operating expenses in
accordance with the creditor’s business
judgment);
(iii) developed and validated using ac
cepted statistical principles and methodol
ogy; and
(iv) periodically revalidated by the use of
appropriate statistical p rinciples and
methodology and adjusted as necessary to
maintain predictive ability.
(2) A creditor may use an empirically de
rived, demonstrably and statistically sound,
credit scoring system obtained from another
person or may obtain credit experience
from which to develop such a system. Any
such system must satisfy the criteria set
forth in paragraph (p)(l)(i) through (iv) of
this section; if the creditor is unable during
the development process to validate the sys
tem based on its own credit experience in
accordance with paragraph (p)(l) of this
section, the system must be validated when
sufficient credit ex perience becom es
available.
A system that fails this validity test is no
longer an empirically derived, demonstrably
and statistically sound, credit scoring sys
tem for that creditor.
(q) Extend credit and extension o f credit mean
the granting of credit in any form (including,
but not limited to, credit granted in addition to
any existing credit or credit limit; credit
granted pursuant to an open-end credit plan;
the refinancing or other renewal of credit, in
cluding the issuance of a new credit card in
place of an expiring credit card or in substitu
tion for an existing credit card; the consolida
tion of two or more obligations; or the con
§ 202.2
tinuance o f existing credit without any special
effort to collect at or after maturity).
(r) Good fa ith means honesty in fact in the
conduct or transaction.
(s) Inadvertent error means a mechanical,
electronic, or clerical error that a creditor
demonstrates was not intentional and occurred
notwithstanding the maintenance o f procedures
reasonably adapted to avoid such errors.
(t) Judgm ental system o f evaluating appli
cants means any system for evaluating the
creditworthiness of an applicant other than an
empirically derived, demonstrably and statisti
cally sound, credit scoring system.
(u) Marital status means the state of being
unmarried, married, or separated, as defined
by applicable state law. The term “ unmarried”
includes persons who are single, divorced, or
widowed.
(v) Negative fa c to r o r value, in relation to the
age o f elderly applicants, means utilizing a
factor, value, or weight that is less favorable
regarding elderly applicants than the creditor’s
experience warrants or is less favorable than
the factor, value, or weight assigned to the
class of applicants that are not classified as
elderly and are most favored by a creditor on
the basis o f age.
(w) Open-end credit means credit extended
under a plan under which a creditor may per
mit an applicant to make purchases or obtain
loans from time to time directly from the
creditor or indirectly by use of a credit card,
check, or other device.
(x) Person means a natural person, corpora
tion, government or governmental subdivision
or agency, trust, estate, partnership, coopera
tive, or association.
(y) Pertinent element o f creditworthiness, in
relation to a judgmental system of evaluating
applicants, means any information about appli
cants that a creditor obtains and considers and
that has a demonstrable relationship to a de
termination o f creditworthiness.
(z) Prohibited basis means race, color, reli
gion, national origin, sex, marital status, or
age (provided that the applicant has the capac3
§ 202.2
ity to enter into a binding contract); the fact
that all or part of the applicant’s income de
rives from any public assistance program; or
the fact that the applicant has in good faith
exercised any right under the Consumer Credit
Protection Act or any state law upon which an
exemption has been granted by the Board.
(aa) State means any state, the District of Co
lumbia, the Commonwealth of Puerto Rico, or
any territory or possession of the United
States.
SECTIO N 2 0 2 .3 — Lim ited E xceptions
for Certain C lasses o f Transactions
(a) Public-utilities credit.
(1) Definition. Public-utilities credit refers
to extensions of credit that involve publicutility services provided through pipe, wire,
or other connected facilities, or radio or
similar transmission (including extensions
of such facilities), if the charges for service,
delayed paym ent, and any discount for
prompt payment are filed with or regulated
by a government unit.
(2) Exceptions. The following provisions of
this regulation do not apply to publicutilities credit:
(i) section 202.5(d)(1) concerning infor
mation about marital status;
(ii) section 202.10 relating to furnishing
of credit information; and
(iii) section 202.12(b) relating to record
retention.
(b) Securities credit.
(1) Definition. Securities credit refers to ex
tensions of credit subject to regulation un
der section 7 o f the Securities Exchange
Act of 1934 or extensions of credit by a
broker or dealer subject to regulation as a
broker or dealer under the Securities Ex
change Act of 1934.
(2) Exceptions. The following provisions of
this regulation do not apply to securities
credit:
(i) section 202.5(c) concerning informa
tion about a spouse or former spouse;
(ii) section 202.5(d)(1) concerning infor
mation about marital status;
4
Regulation B
(iii) section 202.5(d)(3) concerning infor
mation about the sex of an applicant;
(iv) section 202.7(b) relating to designa
tion o f name, but only to the extent nec
essary to prevent violation of rules re
garding an account in which a broker or
dealer has an interest, or rules necessitat
ing the aggregation o f accounts o f
spouses for the purpose of determining
controlling interests, beneficial interests,
beneficial ownership, or purchase limita
tions and restrictions;
(v) section 202.7(c) relating to action
concerning open-end accounts, but only
to the extent the action taken is on the
basis of a change of name or marital
status;
(vi) section 202.7(d) relating to the sig
nature of a spouse or other person;
(vii) section 202.10 relating to furnishing
of credit information; and
(viii) section 202.12(b) relating to record
retention.
(c) Incidental credit.
(1) Definition. Incidental credit refers to ex
tensions o f consum er credit other than
credit o f the types described in paragraphs
(a) and (b) of this section—
(i) that are not made pursuant to the
terms of a credit card account;
(ii) that are not subject to a finance
charge (as defined in Regulation Z, 12
CFR 226.4); and
(iii) that are not payable by agreement in
more than four installments.
(2) Exceptions. The following provisions of
this regulation do not apply to incidental
credit:
(i) section 202.5(c) concerning informa
tion about a spouse or former spouse;
(ii) section 202.5(d)(1) concerning infor
mation about marital status;
(iii) section 202.5(d)(2) concerning infor
mation about income derived from ali
mony, child support, or separate mainte
nance payments;
(iv) section 202.5(d)(3) concerning infor
mation about the sex of an applicant, but
only to the extent necessary for medical
records or similar purposes;
Regulation B
(v) section 202.7(d) relating to the signa
ture of a spouse or other person;
(vi) sectio n
202.9
relating
to
notifications;
(vii) section 202.10 relating to furnishing
of credit information; and
(viii) section 202.12(b) relating to record
retention.
(d) Government credit.
(1) Definition. Government credit refers to
extensions o f credit made to governments
or governmental subdivisions, agencies, or
instrumentalities.
(2) Applicability o f regulation. Except for
section 202.4, the general rule prohibiting
discrimination on a prohibited basis, the re
quirements of this regulation do not apply
to government credit.
SECTIO N 2 0 2 .4 — General Rule
Prohibiting D iscrim ination
A creditor shall not discriminate against an
applicant on a prohibited basis regarding any
aspect of a credit transaction.
SE C T IO N 2 0 2 .5 — R ules Concerning
Taking o f A pplications
(a) D iscouraging applications. A creditor
shall not make any oral or written statement,
in advertising or otherwise, to applicants or
prospective applicants that would discourage
on a prohibited basis a reasonable person from
making or pursuing an application.
(b) G eneral rules concerning requests fo r
information.
(1) Except as provided in paragraphs (c)
and (d) of this section, a creditor may re
quest any information in connection with an
application.1
(2) Required collection o f information. Not
withstanding paragraphs (c) and (d) of this
section, a creditor shall request information
for monitoring purposes as required by sec
tion 202.13 for credit secured by the appli
1 This paragraph does not limit or abrogate any federal
or state law regarding privacy, privileged inform ation,
credit reporting limitations, or similar restrictions on obtain
able information.
§ 202.5
cant’s dwelling. In addition, a creditor may
obtain information required by a regulation,
order, or agreement issued by, or entered
into with, a court or an enforcement agency
(including the attorney general o f the
United States or a similar state official) to
monitor or enforce compliance with the act,
this regulation, or other federal or state stat
ute or regulation.
(3) Special-purpose credit. A creditor may
obtain inform ation that is otherwise re
stricted to determ ine e lig ib ility for a
special-purpose credit program, as provided
in section 202.8(c) and (d).
(c) Inform ation about a spouse or fo rm er
spouse.
(1) Except as permitted in this paragraph, a
creditor may not request any information
concerning the spouse or former spouse of
an applicant.
(2) Permissible inquiries. A creditor may
request any information concerning an ap
plicant’s spouse (or former spouse under
paragraph (c)(2)(v)) that may be requested
about the applicant if—(i) the spouse will be permitted to use
the account;
(ii) the spouse will be contractually li
able on the account;
(iii) the ap plicant is relying on the
spouse’s income as a basis for repayment
of the credit requested;
(iv) the applicant resides in a community
property state or property on which the
applicant is relying as a basis for repay
ment of the credit requested is located in
such a state; or
(v) the applicant is relying on alimony,
child support, or separate maintenance
payments from a spouse or former spouse
as a basis for repayment of the credit
requested.
(3) O ther accounts o f the applicant. A
creditor may request an applicant to list any
account upon which the applicant is liable
and to provide the name and address in
which the account is carried. A creditor
may also ask the names in which an appli
cant has previously received credit.
(d) Other limitations on information requests.
(1) M arital status. If an applicant applies
5
§ 202.5
for individual unsecured credit, a creditor
shall not inquire about the applicant’s mari
tal status unless the applicant resides in a
community property state or is relying on
property located in such a state as a basis
for repayment of the credit requested. If an
application is for other than individual un
secured credit, a creditor may inquire about
the applicant’s marital status, but shall use
only the terms “ m arried,” “ unm arried,”
and “ separated.” A creditor may explain
that the category “ unm arried” includes
single, divorced, and widowed persons.
(2) Disclosure about income from alimony,
child support, or separate maintenance. A
creditor shall not inquire whether income
stated in an application is derived from ali
mony, child support, or separate mainte
nance payments unless the creditor dis
closes to the applicant that such income
need not be revealed if the applicant does
not want the creditor to consider it in deter
mining the applicant’s creditworthiness.
(3) Sex. A creditor shall not inquire about
the sex of an applicant. An applicant may
be requested to designate a title on an ap
plication form (such as Ms., Miss, Mr., or
Mrs.) if the form discloses that the designa
tion of a title is optional. An application
form shall otherwise use only terms that are
neutral as to sex.
(4) Childbearing, childrearing. A creditor
shall not inquire about birth control prac
tices, intentions concerning the bearing or
rearing of children, or capability to bear
children. A creditor may inquire about the
number and ages of an applicant’s depen
dents or about dependent-related financial
obligations or expenditures, provided such
information is requested without regard to
sex, marital status, or any other prohibited
basis.
(5) Race, color, religion, national origin. A
creditor shall not inquire about the race,
color, religion, or national origin of an ap
plicant or any other person in connection
with a credit transaction. A creditor may
inquire about an applicant’s permanent resi
dence and immigration status.
(e) Written applications. A creditor shall take
written applications for the types o f credit
6
Regulation B
covered by section 202.13(a) but need not
take written applications for other types of
credit.
SE C T IO N 20 2.5a — R ules on Providing
Appraisal Reports
(a) Providing appraisals. A creditor shall pro
vide a copy of the appraisal report used in
connection with an application for credit that
is to be secured by a lien on a dwelling. A
creditor shall comply with either paragraph
(a)(1) or (a)(2) o f this section.
(1) Routine delivery. A creditor may rou
tinely provide a copy of the appraisal report
to an applicant (whether credit is granted or
denied or the application is withdrawn).
(2) Upon request. A creditor that does not
routinely provide appraisal reports shall
provide a copy upon an applicant’s written
request.
(i) Notice. A creditor that provides ap
praisal reports only upon request shall
notify an applicant in writing of the right
to receive a copy o f an appraisal report.
The notice may be given at any time
during the application process but no
later than when the creditor provides no
tice of action taken under section 202.9
of this part. The notice shall specify that
the applicant’s request must be in writ
ing, give the creditor’s mailing address,
and state the time for making the request
as provided in paragraph (a)(2)(ii) of this
section.
(ii) Delivery. A creditor shall mail or de
liver a copy o f the appraisal report
promptly (generally within 30 days) after
the creditor receives an applicant’s re
quest, receives the report, or receives re
imbursement from the applicant for the
report, w hichever is last to occur. A
creditor need not provide a copy when
the applicant’s request is received more
than 90 days after the creditor has pro
vided notice o f action taken on the appli
cation under section 202.9 o f this part or
90 days after the application is
withdrawn.
(b) Credit unions. A creditor that is subject to
the regulations of the National Credit Union
Regulation B
Administration on making copies of appraisals
available is not subject to this section.
(c) Definitions. For purposes of paragraph (a)
of this section, the term dwelling means a
residential structure that contains one to four
units whether or not that structure is attached
to real property. The term includes, but is not
limited to, an individual condominium or co
operative unit, and a mobile or other manufac
tured home. The term appraisal report means
the document(s) relied upon by a creditor in
evaluating the value of the dwelling.
SE C T IO N 2 0 2 .6 — R ules C oncerning
Evaluation o f A pplications
(a) General rule concerning use o f informa
tion. Except as otherwise provided in the act
and this regulation, a creditor may consider
any information obtained, so long as the infor
mation is not used to discriminate against an
applicant on a prohibited basis.2
(b) S p ecific rules concernin g use o f
information.
(1) Except as provided in the act and this
regulation, a creditor shall not take a pro
hibited basis into account in any system of
evalu atin g
the
cred itw o rth in ess
of
applicants.
(2) Age, receipt o f public assistance.
(i) Except as permitted in this paragraph,
a creditor shall not take into account an
applicant’s age (provided that the appli
cant has the capacity to enter into a bind
ing contract) or whether an applicant’s
income derives from any public assis
tance program.
(ii) In an empirically derived, demonstra
bly and statistically sound, credit scoring
system, a creditor may use an applicant’s
age as a predictive variable, provided that
the age of an elderly applicant is not
assigned a negative factor or value.
(iii) In a judgmental system of evaluating
creditworthiness, a creditor may consider
2 The legislative history o f the act indicates that the
Congress intended an “ effects test" concept, as outlined in
the employment field by the Supreme Court in the cases of
G riggs v. D uke Power Co.. 401 U.S. 424 (1971), and
A lbem arle P aper Co. v. M oody. 422 U.S. 405 (1975), to be
applicable to a creditor’s determination o f creditworthiness.
§ 202.6
an applicant’s age or whether an appli
cant’s income derives from any public
assistance program only for the purpose
of determining a pertinent element of
creditworthiness.
(iv) In any system o f evaluating credit
worthiness, a creditor may consider the
age of an elderly applicant when such
age is used to favor the elderly applicant
in extending credit.
(3) Childbearing, childrearing. In evaluat
ing creditworthiness, a creditor shall not use
assumptions or aggregate statistics relating
to the likelihood that any group of persons
will bear or rear children or will, for that
reason, receive diminished or interrupted in
come in the future.
(4) Telephone listing. A creditor shall not
take into account whether there is a tele
phone listing in the name of an applicant
for consumer credit but may take into ac
count whether there is a telephone in the
applicant’s residence.
(5) Income. A creditor shall not discount or
exclude from consideration the income of
an applicant or the spouse of an applicant
because of a prohibited basis or because the
income is derived from part-time employ
ment or is an annuity, pension, or other
retirement benefit; a creditor may consider
the amount and probable continuance of
any income in evaluating an applicant’s
creditworthiness. When an applicant relies
on alimony, child support, or separate main
tenance payments in applying for credit, the
creditor shall consider such payments as in
come to the extent that they are likely to be
consistently made.
(6) Credit history. To the extent that a
creditor considers credit history in evaluat
ing the creditworthiness of similarly quali
fied applicants for a sim ilar type and
amount of credit, in evaluating an appli
can t’s creditw orthiness a credito r shall
consider—•
(i) the credit history, when available, of
accounts designated as accounts that the
applicant and the applicant’s spouse are
permitted to use or for which both are
contractually liable;
(ii) on the applicant’s request, any infor
mation the applicant may present that
7
§ 202.6
tends to indicate that the credit history
being considered by the creditor does not
accurately reflect the applicant's credit
worthiness; and
(iii) on the applicant’s request, the credit
history, when available, of any account
reported in the name of the applicant’s
spouse or former spouse that the appli
cant can demonstrate accurately reflects
the applicant’s creditworthiness.
(7) Immigration status. A creditor may con
sider whether an applicant is a permanent
resident o f the United States, the applicant’s
immigration status, and any additional in
formation that may be necessary to ascer
tain the creditor’s rights and remedies re
garding repayment.
(c) State property laws. A creditor’s consider
ation or application of state property laws di
rectly or indirectly affecting creditworthiness
does not constitute unlawful discrimination for
the purposes of the act or this regulation.
S E C T IO N 202 .7 — R u les C o n cern in g
E x ten sio n s o f C redit
(a) Individual accounts. A creditor shall not
refuse to grant an individual account to a
creditworthy applicant on the basis of sex,
marital status, or any other prohibited basis.
(b) Designation o f name. A creditor shall not
refuse to allow an applicant to open or main
tain an account in a birth-given first name and
a surname that is the applicant’s birth-given
surname, the spouse’s surname, or a combined
surname.
(c) A ctio n con cern in g existin g o p en -en d
accounts.
(1) Limitations. In the absence of evidence
of the applicant’s inability or unwillingness
to repay, a creditor shall not take any of the
following actions regarding an applicant
who is contractually liable on an existing
open-end account on the basis of the appli
cant’s reaching a certain age or retiring or
on the basis of a change in the applicant’s
name or marital status:
(i) require a reapplication, except as pro
vided in paragraph (c)(2) of this section;
Regulation B
(ii) change the terms of the account; or
(iii) terminate the account.
(2) Requiring reapplication. A creditor may
require a reapplication for an open-end ac
count on the basis of a change in the mari
tal status of an applicant who is contractu
ally liable if the credit granted was based in
whole or in part on income of the appli
cant’s spouse and if information available to
the creditor indicates that the applicant’s in
come may not support the amount of credit
currently available.
(d) Signature o f spouse or other person.
(1) Rule fo r qualified applicant. Except as
provided in this paragraph, a creditor shall
not require the signature o f an applicant’s
spouse or other person, other than a joint
applicant, on any credit instrument if the
applicant qualifies under the creditor’s stan
dards of creditworthiness for the amount
and terms of the credit requested.
(2) Unsecured credit. If an applicant re
quests unsecured credit and relies in part
upon property that the applicant owns
jointly with another person to satisfy the
creditor’s standards of creditworthiness, the
creditor may require the signature o f the
other person only on the instrument(s) nec
essary, or reasonably believed by the credi
tor to be necessary, under the law of the
state in which the property is located, to
enable the creditor to reach the property
being relied upon in the event of the death
or default of the applicant.
(3) Unsecured credit—community property
states. If a married applicant requests unse
cured credit and resides in a community
property state, or if the property upon
which the applicant is relying is located in
such a state, a creditor may require the
signature of the spouse on any instrument
necessary, or reasonably believed by the
creditor to be necessary, under applicable
state law to make the community property
available to satisfy the debt in the event of
default if—
(i) applicable state law denies the appli
cant power to manage or control suffi
cient community property to qualify for
the amount of credit requested under the
Regulation B
creditor’s standards of creditworthiness;
and
(ii) the applicant does not have sufficient
sep arate property to qualify for the
amount of credit requested without regard
to community property.
(4) Secured credit. If an applicant requests
secured credit, a creditor may require the
signature of the applicant’s spouse or other
person on any instrument necessary, or rea
sonably believed by the creditor to be nec
essary, under applicable state law to make
the property being offered as security avail
able to satisfy the debt in the event of de
fault. for example, an instrument to create a
valid lien, pass clear title, waive inchoate
rights, or assign earnings.
(5) Additional parties. If, under a creditor’s
standards of creditworthiness, the personal
liability of an additional party is necessary
to support the extension o f the credit re
quested, a creditor may request a cosigner,
guarantor, or the like. The app licant's
spouse may serve as an additional party, but
the creditor shall not require that the spouse
be the additional party.
(6) Rights o f additional parties. A creditor
shall not impose requirements upon an ad
ditional party that the creditor is prohibited
from imposing upon an applicant under this
section.
(e) Insurance. A creditor shall not refuse to
extend credit and shall not terminate an ac
count because credit life, health, accident, dis
ability, or other credit-related insurance is not
available on the basis of the applicant’s age.
S E C T IO N 2 0 2 .8 — Special-Purpose Credit
Programs
(a) Standards fo r programs. Subject to the
provisions of paragraph (b) of this section, the
act and this regulation permit a creditor to
extend special-purpose credit to applicants
who meet eligibility requirements under the
following types of credit programs:
(1) any credit assistance program expressly
authorized by federal or state law for the
benefit of an economically disadvantaged
class of persons;
(2) any credit assistance program offered
§ 202.8
by a not-for-profit organization, as defined
under section 501(c) o f the Internal Rev
enue Code of 1954, as amended, for the
benefit o f its members or for the benefit of
an economically disadvantaged class o f per
sons; or
(3) any special-purpose credit program of
fered by a for-profit organization or in
which such an organization participates to
meet special social needs, if—
(i) the program is established and admin
istered pursuant to a written plan that
identifies the class of persons that the
program is designed to benefit and sets
forth the procedures and standards for ex
tending credit pursuant to the program;
and
(ii) the program is established and ad
ministered to extend credit to a class of
persons who, under the organization’s
customary standards of creditworthiness,
probably would not receive such credit or
would receive it on less favorable terms
than are ordinarily available to other ap
plicants applying to the organization for a
similar type and amount of credit.
(b) Rules in other section.
(1) General applicability. All of the provi
sions of this regulation apply to each o f the
special-purpose credit programs described in
paragraph (a) of this section unless modi
fied by this section.
(2) Common characteristics. A program de
scribed in paragraph (a)(2) or (a)(3) of this
section qualifies as a special-purpose credit
program only if it was established and is
adm inistered so as not to discrim inate
against an applicant on any prohibited ba
sis; however, all program participants may
be required to share one or more common
characteristics (for example, race, national
origin, or sex) so long as the program was
not established and is not administered with
the purpose of evading the requirements of
the act or this regulation.
(c) Special rule concerning requests and use
o f information. If participants in a specialpurpose credit program described in paragraph
(a) o f this section are required to possess one
or more common characteristics (for example,
race, national origin, or sex) and if the pro
9
§ 202.8
gram otherwise satisfies the requirements of
paragraph (a), a creditor may request and con
sider information regarding the common characteristic(s) in determining the applicant’s eli
gibility for the program.
(d) Special rule in the case o f financial need.
If financial need is one of the criteria under a
special-purpose program described in para
graph (a) of this section, the creditor may
request and consider, in determining an appli
cant’s eligibiltiy for the program, information
regarding the applicant’s marital status; ali
mony, child support, and separate maintenance
income; and the spouse’s financial resources.
In addition, a creditor may obtain the signa
ture of an applicant’s spouse or other person
on an application or credit instrument relating
to a special-purpose program if the signature
is required by federal or state law.
SECTIO N 20 2 .9 — N otifications
(a) Notification o f action taken, ECOA notice,
and statement o f specific reasons.
(1) When notification is required. A credi
tor shall notify an applicant of action taken
within—
(i) 30 days after receiving a completed
application concerning the creditor’s ap
proval of, counteroffer to, or adverse ac
tion on the application;
(ii) 30 days after taking adverse action
on an incomplete application, unless no
tice is provided in accordance with para
graph (c) of this section;
(iii) 30 days after taking adverse action
o f an existing account; or
(iv) 90 days after notifying the applicant
of a counteroffer if the applicant does not
expressly accept or use the credit offered.
(2) Content o f notification when adverse
action is taken. A notification given to an
applicant when adverse action is taken shall
be in writing and shall contain: a statement
of the action taken; the name and address
of the creditor; a statement of the provi
sions of section 701(a) of the act; the name
and address of the federal agency that ad
ministers compliance with respect to the
creditor; and either—
Regulation B
(i) a statement of specific reasons for the
action taken; or
(ii) a disclosure of the applicant’s right
to a statement of specific reasons within
30 days, if the statement is requested
within 60 days of the creditor’s notifica
tion. The disclosure shall include the
name, address, and telephone number of
the person or office from which the state
ment of reasons can be obtained. If the
creditor chooses to provide the reasons
orally, the creditor shall also disclose the
applicant’s right to have them confirmed
in writing within 30 days of receiving a
written request for confirmation from the
applicant.
(3) Notification to business credit appli
cants. For business credit, a creditor shall
comply with the requirements of this para
graph in the following manner:
(i) With regard to a business that had
gross revenues of $1,000,000 or less in
its preceding fiscal year (other than an
extension of trade credit, credit incident
to a factoring agreement, or other similar
types of business credit), a creditor shall
comply with paragraphs (a)(1) and (2),
except that—
(A) The statement of the action taken
may be given orally or in writing,
when adverse action is taken;
(B) Disclosure o f an applicant’s right
to a statement of reasons may be given
at the time of application, instead of
when adverse action is taken, provided
the disclosure is in a form the appli
cant may retain and contains the infor
mation required by paragraph (a)(2)(ii)
and the ECOA notice specified in para
graph (b)(1) o f this section;
(C) For an application made solely by
telephone, a creditor satisfies the re
quirements o f this paragraph by an oral
statement o f the action taken and of
the applicant’s right to a statement of
reasons for adverse action.
(ii) With regard to a business that had
gross revenues in excess of $1,000,000 in
its preceding fiscal year or an extension
of trade credit, credit incident to a factor
ing agreement, or other similar types of
business credit, a creditor shall—
Regulation B
(A) Notify the applicant, orally or in
writing, within a reasonable time of
the action taken; and
(B) Provide a written statement o f the
reasons for adverse action and the
ECOA notice specified in paragraph
(b)(1) of this section if the applicant
makes a written request for the reasons
within 60 days of being notified o f the
adverse action.
(b) Form o f ECOA notice and statement o f
specific reasons.
(1) ECOA notice. To satisfy the disclosure
requirements of paragraph (a)(2) of this sec
tion regarding section 701(a) of the act, the
creditor shall provide a notice that is sub
stantially similar to the following:
The federal Equal Credit Opportunity Act prohib
its creditors from discriminating against credit
applicants on the basis of race, color, religion,
national origin, sex, marital status, age (provided
the applicant has the capacity to enter into a
binding contract); because all or part of the appli
cant’s income derives from any public assistance
program; or because the applicant has in good
faith exercised any right under the Consumer
Credit Protection Act. The federal agency that
administers compliance with this law concerning
this creditor is (name and address as specified by
the appropriate agency listed in appendix A of
this regulation).
(2) Statement o f specific reasons. The state
ment of reasons for adverse action required
by paragraph (a)(2)(i) of this section must
be specific and indicate the principal rea
s o n s ) for the adverse action. Statements
that the adverse action was based on the
creditor’s internal standards or policies or
that the applicant failed to achieve the
qualifying score on the creditor’s credit
scoring system are insufficient.
(c) Incomplete applications.
(1) Notice alternatives. Within 30 days af
ter receiving an application that is incom
plete regarding matters that an applicant can
complete, the creditor shall notify the appli
cant either—
(i) of action taken, in accordance with
paragraph (a) of this section; or
(ii) of the incompleteness, in accordance
with paragraph (c)(2) of this section.
(2) Notice o f incompleteness. If additional
§ 202.9
information is needed from an applicant,
the creditor shall send a written notice to
the applicant specifying the information
needed, designating a reasonable period of
time for the applicant to provide the infor
mation, and informing the applicant that
failure to provide the information requested
will result in no further consideration being
given to the application. The creditor shall
have no further obligation under this section
if the applicant fails to respond within the
designated time period. If the applicant sup
plies the requested information within the
designated time period, the creditor shall
take action on the application and notify the
applicant in accordance with paragraph (a)
of this section.
(3) Oral request fo r information. At its op
tion, a creditor may inform the applicant
orally of the need for additional informa
tion; but if the application remains incom
plete the creditor shall send a notice in ac
cordance with paragraph (c)(1) o f this
section.
(d) Oral notifications by small-volume credi
tors. The requirements of this section (includ
ing statements of specific reasons) are satis
fied by oral notifications in the case of any
creditor that did not receive more than 150
applications during the preceding calendar
year.
(e) W ithdraw al o f app ro ved ap plica tio n .
When an applicant submits an application and
the parties contemplate that the applicant will
inquire about its status, if the creditor ap
proves the application and the applicant has
not inquired within 30 days after applying, the
creditor may treat the application as with
drawn and need not comply with paragraph
(a)(1) of this section.
(f) Multiple applicants. When an application
involves more than one applicant, notification
need only be given to one o f them but must
be given to the primary applicant where one
is readily apparent.
(g) A pplications subm itted through a third
party. When an application is made on behalf
of an applicant to more than one creditor and
the applicant expressly accepts or uses credit
offered by one o f the creditors, notification of
11
§ 202.9
action taken by any of the other creditors is
not required. If no credit is offered or if the
applicant does not expressly accept or use any
credit offered, each creditor taking adverse ac
tion must comply with this section, directly or
through a third party. A notice given by a
third party shall disclose the identity of each
creditor on whose behalf the notice is given.
SE C T IO N 2 02 .1 0 — Furnishing o f Credit
Information
(a) Designation o f accounts. A creditor that
furnishes credit information shall designate—
(1) any new account to reflect the partici
pation of both spouses if the applicant’s
spouse is permitted to use or is contractu
ally liable on the account (other than as a
guarantor, surety, endorser, or sim ilar
party); and
(2) any existing account to reflect such par
ticipation, within 90 days after receiving a
written request to do so from one of the
spouses.
(b) Routine reports to consum er reporting
agency. If a creditor furnishes credit informa
tion to a consumer reporting agency concern
ing an account designated to reflect the par
ticipation of both spouses, the creditor shall
furnish the information in a manner that will
enable the agency to provide access to the
information in the name of each spouse.
(c) Reporting in response to inquiry. If a
creditor furnishes credit information in re
sponse to an inquiry concerning an account
designated to reflect the participation of both
spouses, the creditor shall furnish the informa
tion in the name of the spouse about whom
the information is requested.
SE C T IO N 202 .1 1— R elation to State
Law
(a) Inconsistent state laws. Except as other
wise provided in this section, this regulation
alters, affects, or preempts only those state
laws that are inconsistent with the act and this
regulation and then only to the extent of the
inconsistency. A state law is not inconsistent if
it is more protective of an applicant.
12
Regulation B
(b) Preempted provisions o f state law.
(1) A state law is deemed to be inconsistent
with the requirements of the act and this
regulation and less protective of an appli
cant within the meaning of section 705(f) of
the act to the extent that the law—
(i) requires or permits a practice or act
prohibited by the act or this regulation;
(ii) prohibits the individual extension of
consumer credit to both parties to a mar
riage if each spouse individually and vol
untarily applies for such credit;
(iii) prohibits inquiries or collection of
data required to comply with the act or
this regulation;
(iv) prohibits asking or considering age
in an empirically derived, demonstrably
and statistically sound, credit scoring sys
tem to determine a pertinent element of
creditworthiness, or to favor an elderly
applicant; or
(v) prohibits inquiries necessary to estab
lish or administer a special-purpose credit
program as defined by section 202.8.
(2) A creditor, state, or other interested
party may request the Board to determine
whether a state law is inconsistent with the
requirements of the act and this regulation.
(c) Laws on finance charges, loan ceilings. If
married applicants voluntarily apply for and
obtain individual accounts with the same
creditor, the accounts shall not be aggregated
or otherwise combined for purposes of deter
mining permissible finance charges or loan
ceilings under any federal or state law. Permis
sible loan ceiling laws shall be construed to
permit each spouse to become individually li
able up to the amount of the loan ceilings,
less the amount for which the applicant is
jointly liable.
(d) State and federal laws not affected. This
section does not alter or annul any provision
of state property laws, laws relating to the
disposition o f decedents’ estates, or federal or
state banking regulations directed only toward
insuring the solvency of financial institutions.
(e) Exemption fo r state-regulated transactions.
(1) Applications. A state may apply to the
Board for an exemption from the require
ments o f the act and this regulation for any
Regulation B
class of credit transactions within the state.
The Board will grant such an exemption if
the Board determines that—
(i) the class of credit transactions is sub
ject to state law requirements substan
tially similar to the act and this regula
tion or that applicants are afforded
greater protection under state law; and
(ii) there is adequate provision for state
enforcement.
(2) Liability and enforcement.
(i) No exemption will extend to the civilliability provisions of section 706 or the
administrative-enforcement provisions of
section 704 of the act.
(ii) After an exemption has been granted,
the requirements of the applicable state
law (except for additional requirements
not imposed by federal law) will consti
tute the requirements of the act and this
regulation.
S E C T IO N 2 0 2 .1 2 — R eco rd R etentio n
(a) Retention o f prohibited information. A
creditor may retain in its files information that
is prohibited by the act or this regulation in
evaluating applications, without violating the
act or this regulation, if the information was
obtained—
(1) from any source prior to March 23,
1977;
(2) from consumer reporting agencies, an
applicant, or others without the specific re
quest of the creditor; or
(3) As required to monitor compliance with
the act and this regulation or other federal
or state statutes or regulations.
(b) Preservation o f records.
(1) Applications. For 25 months (12 months
for business credit) after the date that a
creditor notifies an applicant of action taken
on an application or of incompleteness, the
creditor shall retain in original form or a
copy thereof —
(i) any application that it receives, any
information required to be obtained con
cerning characteristics of the applicant to
monitor compliance with the act and this
regulation or other similar law, and any
other written or recorded information
§ 202.12
used in evaluating the application and not
returned to the applicant at the appli
cant’s request;
(ii) a copy of the following documents if
furnished to the applicant in written form
(or, if furnished orally, any notation or
memorandum made by the creditor);
(A) the notification of action taken;
and
(B) the statement of specific reasons
for adverse action; and
(iii) any written statement submitted by
the applicant alleging a violation of the
act or this regulation.
(2) Existing accounts. For 25 months (12
months for business credit) after the date
that a creditor notifies an applicant o f ad
verse action regarding an existing account,
the creditor shall retain as to that account,
in original form or a copy thereof—
(i) any written or recorded information
concerning the adverse action; and
(ii) any written statement submitted by
the applicant alleging a violation o f the
act or this regulation.
(3) Other applications. For 25 months (12
months for business credit) after the date
that a creditor receives an application for
which the creditor is not required to comply
with the notification requirements of section
202.9, the creditor shall retain all written or
recorded information in its possession con
cerning the applicant, including any nota
tion of action taken.
(4) Enforcement proceedings and investiga
tions. A creditor shall retain the information
specified in this section beyond 25 months
(12 months for business credit) if it has
actual notice that it is under investigation or
is subject to an enforcement proceeding for
an alleged violation of the act or this regu
lation by the attorney general of the United
States or by an enforcement agency charged
with monitoring that creditor’s compliance
with the act and this regulation, or if it has
been served with notice of an action filed
pursuant to section 706 of the act and sec
tion 202.14 of this regulation. The creditor
shall retain the information until final dis
position of the matter, unless an earlier time
is allowed by order of the agency or court.
(5) Special rule fo r certain business-credit
13
§ 202.12
applications. With regard to a business with
gross revenues in excess o f $1,000,000 in
its preceding fiscal year, or an extension of
trade credit, credit incident to a factoring
agreement or other similar types of business
credit, the creditor shall retain records for at
least 60 days after notifying the applicant of
the action taken. If within that time period
the applicant requests in writing the reasons
for adverse action or that records be re
tained, the creditor shall retain records for
12 months.
(6) Self-tests. For 25 months after a self
test (as defined in section 202.15) has been
completed, the creditor shall retain all writ
ten or recorded information about the self
test. A creditor shall retain information be
yond 25 months if it has actual notice that
it is under investigation or is subject to an
enforcement proceeding for an alleged vio
lation, or if it has been served with notice
of a civil action. In such cases, the creditor
shall retain the information until final dis
position of the matter, unless an earlier time
is allowed by the appropriate agency or
court order.
SECTIO N 20 2 .1 3 — Information for
Monitoring Purposes
(a) Information to be requested. A creditor
that receives an application for credit prima
rily for the purchase or refinancing o f a
dwelling occupied or to be occupied by the
applicant as a principal residence, where the
extension of credit will be secured by the
dwelling, shall request as part of the applica
tion the following information regarding the
applicant(s):
(1) race or national origin, using the cat
egories American Indian or Alaskan Native;
Asian or Pacific Islander; Black; White;
Hispanic; Other (Specify);
(2) sex;
(3) marital status, using the categories Mar
ried, Unmarried, and Separated; and
(4) age.
“ Dwelling” means a residential structure that
contains one to four units, whether or not that
structure is attached to real property. The term
14
Regulation B
includes, but is not limited to, an individual
condominium or cooperative unit, and a mo
bile or other manufactured home.
(b) Obtaining o f information. Questions re
garding race or national origin, sex, marital
status, and age may be listed, at the creditor’s
option, on the application form or on a sepa
rate form that refers to the application. The
applicant(s) shall be asked but not required to
supply the requested information. If the appli
c a n ts) chooses not to provide the information
or any part of it, that fact shall be noted on
the form. The creditor shall then also note on
the form, to the extent possible, the race or
national origin and sex of the applicant(s) on
the basis of visual observation or surname.
(c) D isclosure to applicant(s). The creditor
shall inform the applicant(s) that the informa
tion regarding race or national origin, sex,
marital status, and age is being requested by
the federal government for the purpose of
monitoring compliance with federal statutes
that prohibit creditors from discriminating
against applicants on those bases. The creditor
shall also inform the applicant(s) that if the
applicant(s) chooses not to provide the infor
mation, the creditor is required to note the
race or national origin and sex on the basis of
visual observation or surname.
(d) Substitute monitoring program. A monitor
ing program required by an agency charged
with administrative enforcement under section
704 of the act may be substituted for the
requirements contained in paragraphs (a), (b),
and (c).
SE C T IO N 2 0 2 .1 4 — Enforcement,
Penalties, and Liabilities
(a) Administrative enforcement.
(1) As set forth more fully in section 704
of the act, administrative enforcement of
the act and this regulation regarding certain
creditors is assigned to the Comptroller of
the Currency, Board of Governors of the
Federal Reserve System, board of directors
of the Federal Deposit Insurance Corpora
tion, Office of Thrift Supervision, National
C redit U nion A dm inistration, Interstate
Regulation B
Commerce Commission, secretary of agri
culture, Farm Credit Administration, Securi
ties and Exchange Commission, Small Busi
ness A d m inistration , and secretary of
transportation.
(2) Except to the extent that administrative
enforcement is specifically assigned to other
authorities, compliance with the require
ments imposed under the act and this regu
lation is enforced by the Federal Trade
Commission.
(b) Penalties and liabilities.
(1) Sections 706(a) and (b) and 702(g) of
the act provide that any creditor that fails to
comply with a requirement imposed by the
act or this regulation is subject to civil li
ability for actual and punitive damages in
individual or class actions. Pursuant to sec
tions 704(b), (c), and (d) and 702(g) of the
act, violations of the act or regulation also
constitute violations o f other federal laws.
Liability for punitive damages is restricted
to nongovernmental entities and is limited
to $10,000 in individual actions and the
lesser o f $500,000 or 1 percent of the credi
tor’s net worth in class actions. Section
706(c) provides for equitable and declara
tory relief and section 706(d) authorizes the
awarding of costs and reasonable attorney’s
fees to an aggrieved applicant in a success
ful action.
(2) As provided in section 706(f), a civil
action under the act or this regulation may
be brought in the appropriate United States
district court without regard to the amount
in controversy or in any other court of
competent jurisdiction within two years af
ter the date of the occurrence of the viola
tion, or within one year after the com
mencement of an administrative enforce
ment proceeding or of a civil action brought
by the attorney general of the United States
within two years after the alleged violation.
(3) If an agency responsible for administra
tive enforcement is unable to obtain compli
ance with the act or this regulation, it may
refer the matter to the attorney general of
the United States. In addition, if the Board,
the Comptroller of the Currency, the Fed
eral Deposit Insurance Corporation, the Of
fice of Thrift Supervision, or the National
§ 202.14
Credit Union Administration has reason to
believe that one or more creditors engaged
in a pattern or practice of discouraging or
denying applications in violation o f the act
or this regulation, the agency shall refer the
matter to the attorney general. Furthermore,
the agency may refer a matter to the attor
ney general if the agency has reason to
believe that one or more creditors violated
section 701(a) of the act.
(4) On referral, or whenever the attorney
general has reason to believe that one or
more creditors engaged in a pattern of prac
tice in violation of the act or this regula
tion, the attorney general may bring a civil
action for such relief as may be appropriate,
including actual and punitive damages and
injunctive relief.
(5) If the Board, the Comptroller of the
Currency, the Federal Deposit Insurance
Corporation, the Office of Thrift Supervi
sion, or the National Credit Union Adminis
tration has reason to believe (as a result of
a consumer complaint, conducting a con
sumer compliance examination, or other
wise) that a violation of the act or this
regulation has occurred which is also a vio
lation Of the Fair Housing Act, and the mat
ter is not referred to the attorney general,
the agency shall notify—
(i) the secretary of Housing and Urban
Development; and
(ii) the applicant that the secretary of
Housing and Urban D evelopm ent has
been notified and that remedies for the
violation may be available under the Fair
Housing Act.
(c) Failure o f compliance. A creditor’s failure
to comply with sections 202.6(b)(6), 202.9,
202.10, 202.12 or 202.13 is not a violation if
it results from an inadvertent error. On discov
ering an error under sections 202.9 and
202.10, the creditor shall correct it as soon as
possible. If a creditor inadvertently obtains the
monitoring information regarding the race or
national origin and sex of the applicant in a
dwelling-related transaction not covered by
section 202.13, the creditor may act on and
retain the application without violating the
regulation.
15
§ 202.15
SE C T IO N 2 02 .1 5 — Incentives for
Self-T esting and Self-Correction
(a) General rules.
(1) Voluntary self-testing and correction.
The report or results of the self-test that a
creditor voluntarily conducts (or authorizes)
are privileged as provided in this section.
Data collection required by law or by any
governmental authority is not a voluntary
self-test.
(2) Corrective action required. The privi
lege in this section applies only if the credi
tor has taken or is taking appropriate cor
rective action.
(3) Other privileges. The privilege created
by this section does not preclude the asser
tion of any other privilege that may also
apply.
(b) Self-test defined.
(1) Definition. A self-test is any program,
practice, or study that—
(i) is designed and used specifically to
determine the extent or effectiveness of a
creditor’s com pliance with the act or
Regulation B; and
(ii) creates data or factual information
that is not available and cannot be de
rived from loan or application files or
other
records
related
to
credit
transactions.
(2) Types o f information privileged. The
privilege under this section applies to the
report or results of the self-test, data or
factual information created by the self-test,
and any analysis, opinions, and conclusions
pertaining to the self-test report or results.
The privilege covers workpapers or draft
documents as well as final documents.
(3) Types o f information not privileged. The
privilege under this section does not apply
to—
(i) information about whether a creditor
conducted a self-test, the methodology
used or the scope of the self-test, the
time period covered by the self-test, or
the dates it was conducted; or
(ii) loan and application files or other
business records related to credit transac
tions, and information derived from such
files and records, even if it has been ag
16
Regulation B
gregated, summarized, or reorganized to
facilitate analysis.
(c) Appropriate corrective action.
(1) General requirement. For the privilege
in this section to apply, appropriate correc
tive action is required when the self-test
shows that it is more likely than not that a
violation occurred, even though no violation
has been formally adjudicated.
(2) Determining the scope o f appropriate
corrective action. A creditor must take cor
rective action that is reasonably likely to
remedy the cause and effect of a likely
violation by—
(i) identifying the policies or practices
that are the likely cause of the violation;
and
(ii) assessing the extent and scope of any
violation.
(3) Types o f relief. Appropriate corrective
action may include both prospective and re
medial relief, except that to establish a
privilege under this section—
(i) a creditor is not required to provide
remedial relief to a tester used in a
self-test;
(ii) a creditor is only required to provide
remedial relief to an applicant identified
by the self-test as one whose rights were
more likely than not violated; and
(iii) a creditor is not required to provide
remedial relief to a particular applicant if
the statute of limitations applicable to the
violation expired before the creditor ob
tained the results of the self-test or the
applicant is otherwise ineligible for such
relief.
(4) No admission o f violation. Taking cor
rective action is not an admission that a
violation occurred.
(d)(1) Scope o f privilege. The report or re
sults of a privileged self-test may not be
obtained or used—
(i) by a government agency in any ex
am ination or investigation relating to
compliance with the act or this regula
tion; or
(ii) by a government agency or an appli
cant (including a prospective applicant
who alleges a violatio n o f section
Regulation B
202.5(a)) in any proceeding or civil ac
tion in which a violation of the act or
Regulation B is alleged.
(2) Loss o f privilege. The report or results
of a self-test are not privileged under para
graph (d)(1) of this section if the creditor or
a person with lawful access to the report or
results)—
(i) voluntarily discloses any part o f the
report or results, or any other information
privileged under this section, to an appli
cant or government agency or to the
public;
(ii) discloses any part of the report or
results, or any other information privi
leged under this section, as a defense to
charges that the creditor has violated the
act or regulation; or
(iii) fails or is unable to produce written
or recorded information about the self
test that is required to be retained under
section 202.12(b)(6) when the informa
tion is needed to determine whether the
privilege applies. This paragraph does not
limit any other penalty or remedy that
may be available for a violation of sec
tion 202.12.
(3) Lim ited use o f privileged information.
Notwithstanding paragraph (d)(1) of this
section, the self-test report or results and
any other information privileged under this
section may be obtained and used by an
applicant or government agency solely to
determine a penalty or remedy after a viola
tion of the act or this regulation has been
adjudicated or admitted. Disclosures for this
limited purpose may be used only for the
particular proceeding in which the adjudica
tion or admission was made. Information
disclosed under (d)(3) remains privileged
under paragraph (d)(1) of this section.
A P P E N D IX A — Federal Enforcem ent
A g en cies
The following list indicates the federal agen
cies that enforce Regulation B for particular
classes of creditors. Any questions concerning
a particular creditor should be directed to its
enforcement agency. Terms that are not de
fined in the Federal Deposit Insurance Act (12
Appendix A
USC 1813(s)) shall have the meaning given to
them in the International Banking Act o f 1978
(12 USC 3101).
National banks and fed eral branches and fe d
eral agencies o f foreign banks
Office of the Comptroller of the Currency
Customer Assistance Unit
1301 McKinney Ave.
Suite 3710
Houston, TX 77010
State member banks, branches and agencies
o f foreign banks (other than federal branches,
federal agencies, and insured state branches
o f foreign banks), commercial lending compa
nies owned or controlled by foreign banks,
and organizations operating under section 25
or 25A o f the Federal Reserve A ct
Federal Reserve Bank serving the District in
which the institution is located
Nonmember insured banks and insured state
branches o f foreign banks
Federal Deposit Insurance Corporation re
gional director for the region in which the
institution is located
Savings institutions under the Savings A sso
ciation Insurance Fund o f the FDIC and fe d
erally chartered savings banks insured under
the Bank Insurance Fund o f the FDIC (but
not including state-chartered savings banks in
sured under the Bank Insurance Fund)
Office of Thrift Supervision regional director
for the region in which the institution is
located
Federal credit unions
Regional office of the National Credit Union
Administration serving the area in which the
federal credit union is located
A ir carriers
Assistant General Counsel for Aviation En
forcement and Proceedings
Department of Transportation
400 Seventh Street, S.W.
Washington, D.C. 20590
Creditors subject to Interstate Commerce
Commission
Office of Proceedings
Interstate Commerce Commission
Washington, D.C. 20523
17
Appendix A
Creditors subject to Packers and Stockyards
A ct
Nearest Packers and Stockyards
Administration area supervisor
Sm all business investment companies
U.S. Small Business Administration
1441 L Street, N.W.
Washington, D.C. 20416
Brokers and dealers
Securities and Exchange Commission
Washington, D.C. 20549
Federal Land Banks, Federal Land Bank
Associations, Federal Intermediate Credit
Banks, and Production Credit Associations
Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090
Retailers, finance companies, and all other
creditors not listed above
FTC regional office for region in which the
creditor operates or
Federal Trade Commission
Equal Credit Opportunity
Washington, D.C. 20580
A P P E N D IX B — M odel A pplication
Forms
This appendix contains five model credit ap
plication forms, each designed for use in a
particular type of consumer credit transaction
Regulation B
as indicated by the bracketed caption on each
form. The first sample form is intended for
use in open-end, unsecured transactions; the
second for closed-end, secured transactions;
the third for closed-end transactions, whether
unsecured or secured; the fourth in transac
tions involving community property or occur
ring in community property states; and the
fifth in residential mortgage transactions. The
appendix also contains a model disclosure for
use in complying with section 202.13 for cer
tain dwelling-related loans. All forms con
tained in this appendix are models; their use
by creditors is optional.
The use or modification o f these forms is
governed by the following instructions. A
creditor may change the forms by asking for
additional information not prohibited by sec
tion 202.5; by deleting any information re
quest; or by rearranging the format without
modifying the substance of the inquiries. In
any of these three instances, however, the ap
propriate notices regarding the optional nature
of courtesy titles; the option to disclose ali
mony, child support, or separate maintenance;
and the limitation concerning marital status
inquiries must be included in the appropriate
places if the items to which they relate appear
on the creditor’s form.
If a creditor uses an appropriate appendix B
model form, or modifies a form in accordance
with the above instructions, that creditor shall
be deemed to be acting in compliance with
the provisions of paragraphs (c) and (d) of
section 202.5 of this regulation.
Appendix B
Regulation B
[Open-end, unsecured credit]
CREDIT APPLICATION
I M P O R T A N T i R e a d th e s e D ir e c tio n * b e f o r e c o m p le tin g (hi* A p p lic a tio n .
C heck
A p p ro p r ia te
B ox
□
I f y o u a r e a p p ly in g f o r a n in d iv id u a l a c c o u n t in y o u r o w n n s m e an d a r e rely in g o n y o u r o w n in c o m e o r
a sse ts a n d n o t th e in c o m e o r a sse ts o f a n o th e r p e rs o n a s th e b a s is f o r r e p a y m e n t o f th e c re d it req u e ste d ,
c o m p le te o n ly Se c tio n s A a n d D .
□
I f y o u a re a p p ly in g f o r a j o in t a c c o u n t o r a n a c c o u n t th a t y o u
a n d a n o th e r
all s e c ti o n s , p r o v id in g in f o r m a t io n in B a b o u t th e j o i n t a p p lic a n t o r u se r.
□
K y o u a re a p p ly in g f o r a n in d iv id u a l a c c o u n t, b u t a r e r e ly in g o n in c o m e f ro m a lim o n y , c h ild s u p p o r t, o r
se p a ra te m a in te n a n c e o r o n th e In co m e o r a ssets o f a n o th e r p e rs o n a s th e b a s is f o r r e p a y m e n t o f th e c re d it
req u e ste d , c o m p le te all S e c tio n s to th e e x te n t p o s s ib le , p r o v id in g in f o r m a tio n in B a b o u t th e p e rs o n o n w h o se
a lim o n y , s u p p o r t, o r m a in te n a n c e p a y m e n ts o r in c o m e o r a sse ts y o u a r e relying.
p e r s o n w ill u se, c o m p le te
S E C T IO N A — I N F O R M A T I O N R E G A R D I N G A P P L I C A N T
F u l l N a m e ( L a s t, F irs t, M i d d l e ) ; ............. — ..................................... ............................................................................................................... B i r th d a te :
P r e se n t S t r e e t A d d re s s : ..............................................
P r e se n t n e t sa la r y o r c o m m issio n : $
...................
/
per
/
..
Y e a r s t h e re :
.................. . N o . D e p e n d e n t s : ....................... A g es: ..................
A lim o n y , c h ild M tpport, o r s e p a r a te m a in te n a n c e Incom e f n e e d n o t b e r e v e a le d If y o n d o n o t w ish t o h a v e It c o n s id e r e d as a b a sis
f o r rep a y in g th is o b lig a tio n .
A lim o n y , c h ild s u p p o r t, s e p a r a t e m a in te n a n c e
receiv ed
u n d e r: c o u r t o r d e r
Is any in c o m e listed In th is S e c tio n lik e ly to b e re d u c e d in th e
□
Y es ( E x p la in in d e ta il o n a se p a r a te s h e e t.) N o □
□
w ritte n a g re e m e n t □
o r a l u n d e rs ta n d in g
□
n e x t tw o y e ars?
N a m e o f n e a r e s t re la tiv e
S E C T IO N B — I N F O R M A T I O N R E G A R D I N G J O I N T A P P L I C A N T , U S E R . O R O T H E R P A R T Y ( U s e se p a r a te sh e e ts if n e c e ssa ry .)
B i r th d a te :
F u l l N a m e ( L a s t, F irs t, M id d l e ) : ....... .................
/
/
S ta te -
■
A lim o n y , c h ild s u p p o r t, o r s e p a r a t e m a in te n a n c e In co m e n e e d n o t b e r e v e a le d If y o u d o n o t w ish t o h a v e it c o n s id e r e d a s a b a sis
f o r r ep a y in g Ib is o b lig a tio n .
w ritte n a g re e m e n t □
o r a l u n d e rs ta n d in g □
A lim ony, c h ild s u p p o r t, se p a r a te m a in te n a n c e receiv ed u n d e r: c o u r t o r d e r □
I* a n y In co m e listed I n th is S e c tio n lik e ly to b e re d u c e d in th e
□ Y e* ( E x p la i n in d e ta il o n a se p a r a te sh e et.)
□
No
n e x t tw o y e ars?
N a m e o f n e a r e s t re la tiv e n o t living
R e la tio n sh ip : .......................................................................
S E C T IO N C — M A R I T A L S T A T U S
( D o n o t c o m p le te i f th is la a a a p p lic a tio n f a r a n t a d l 'U n a l a c c o m t .)
A p p lic a n t: □
M a rr ie d
□ S e p a ra te d
□ U n m a r r ie d ( in c lu d in g s in g le, d iv o rc e d , a n d w id o w ed )
O th e r P a r ty : □ M a rr ie d
□
S e p a ra te d
□
U n m a rr ie d ( in c lu d in g single, div o rce d , a n d w id o w e d )
19
Appendix B
Regulation B
S E C T I O N D — A S S E T A N D D E B T I N F O R M A T I O N ( I t S e c tio n B h a s b e e n c o m p le te d , th is S e c tio n s h o u ld b e c o m p le te d g iv in g
in f o r m a t io n a b o u t b o th t h e A p p lic a n t a n d J o in t A p p lic a n t, U se r , o r O th e r P e rso n . P le a se m a r k A p p lic a n t-re la te d
in f o r m a t io n w ith a n “ A . ” I f S e c tio n B w a s n o t c o m p le te d , o n ly g i v j I n fo r m a tio n a b o u t th e A p p lic a n t i n th is S e c tio n .)
A S S E T S O W N E D ( U s e s e p a r a t a s h e e t If n e c e ssa r y - )
S u b jec t t o D e b t?
Y es/N o
V alu e
D e s c r ip tio n o f A sse ts
C ash
N a m e ( s ) o f O w n e r (s )
$
A u to m o b ile s ( M a k e . M o d e l, Y e a r )
C a s h V alue o f L ife I n s u ra n c e (Is s u e r ,
F a c e V a lu e )
k e a i E sta te ( L o c a tio n , D a l e A c q u i re d )
M a rk e ta b le S e c u ritie s ( Is s u e r , T y p e , N o . o f S h a r e s )
O th e r ( L k )
' '
.....
T o t a l A sse ts
$
O U T S T A N D I N G D E B T S ( I n c lu d e c h a r g e a c c o u n ts , in sta lm e n t c o n tra c t s , c r e d it c a r d s,
r e n t, m o rtg a g e s, etc. U se s e p a r a t e s h e e t if n e c e ssa ry .)
T ype o f D ebt
o r A c c t, N o.
C r e d ito r
1.
(L a n d lo r d o r
M o rtg a g e H o ld e r)
□
U
N a m e in W h ic h
A c c t C a r rie d
R ent Paym ent
M o rtg a g e
O rig in a l
D ebt
P r e se n t
B a la n c e
$ ( O m it r e n t)
$ ( O m it r e n t)
i
J
M o n th ly
P a y m e n ts
P;ist D u e?
Y es/N o
%
2.
3.
4.
i.
6.
T o ta l D e b ts
fC r e d it R efere n ce s)
r-------------2.
A re y o u a c o -m a k e r , e n d o rse r, o r
g u a r a n to r o n a n y lo a n o r c o n tr a c t ?
A m th e re a n y u n satisfied
ju d g m e n ts a g a in st y o u ?
Y es O
Y es n
No □
No □
A m ount $
I f “ yea”
fo r w hom ?
T o w hom ?
I f "y ea"
to w h o m o w e d ?
H a v e you b e e n d e c la re d
Y e* Q
I f “y e s”
b a n k r u p t in th e last 14 y e ars?
No □
w h ere?
Y ear
O th e r O b lig a tio n s— ( E .g ., lia b ility to p a y a lim o n y , c h ild s u p p o r t, se p a r a te m a in te n a n c e . U se s e p a r a t e sh e e t if n e ce ssary .)
E v e ry th in g th a t I h ave s ta te d in th is a p p lic a tio n is c o rr e c t to th e b e s t o f m y k n o w le d g e. 1 u n d e rs t a n d th a t y o u will re ta in
th is a p p lic a tio n w h e th e r o r n o t i t is a p p ro v e d . Y o u a r c a u th o ri z e d t o c h e c k m y c re d it a n d e m p lo y m e n t h isto ry a n d t o a n sw e r q u e s
tio n s a b o u t y o u r c re d it e x p e rie n c e w ith m e .
A p p lic a n t 's S i g n a tu r e
20
D ata
O th e r S ig n a tu r e
( W h e r e A p p lic a b le )
D ale
Regulation B
Appendix B
[Closed-end, secured credit]
CREDIT APPLICATION
I M P O R T A N T : R e a d th e s e D ir e c tio n s b e f o r e c o m p le tin g th is A p p lic a tio n .
CU
tk
A p p ro p r ia te
□
Box
□
□
I f y o u a r e a p p ly in g f o r In d iv id u a l c re d it in y o u r o w n n a m e a n d a re r e ly in g o n y o u r o w n in c o m e o r a ssets
a n d n o t th e in c o m e o r a sse ts o f a n o th e r p e rs o n as th e b a sis f o r r e p a y m e n t o f th e c rc d it re q u e s te d , c o m p le te
S e c tio n s A , C , D , a n d E , o m ittin g B a n d th e s e co n d p a r t o f C.
I f th is is a n a p p lic a tio n f o r jo in t c rc d it w ith a n o th e r p e rso n , c o m p le te a ll S e c tio n s, p r o v id in g in f o r m a tio n
i n B a b o u t th e jo in t a p p lic a n t.
I f y o u a r e a p p ly in g fo r in d iv id u a l c re d it, b u t a re r e ly in g o n in c o m e f r o m a lim o n y , c h ild s u p p o r t, o r se p a
r a te m a in te n a n c e o r o n th e in c o m e o r a sse ts o f a n o th e r p e rso n a s th e b a sis f o r re p a y m e n t o f t h e c re d it
r e q u e ste d , c o m p le te ail S e c tio n s t o th e e x te n t p o ssib le, p ro v id in g in f o r m a t io n in B a b o u t th e p e r s o n o n
w h o se a lim o n y , s u p p o r t, o r m a in te n a n c e p a y m e n ts o r in c o m e o r a sse ts y o u a r c rely in g .
A m ount R equeued
P a y m e n t D a t e D e s ire d
P ro c e e d s o f C re d it
$............................... — ..
....................................................
T o b e U s e d Fo r............................... ...................... ......................................................... - .....— ...........
S E C T IO N A — I N F O R M A T I O N R E G A R D I N G A P P L IC A N T
F ull N a m e ( L a a t, F irs t. M i d d l e ) : .............................. ................................ ....................................................................................
B i r th d a te :
/
/
P re se n t S tre e t A d d re s s : ............................................................................................................................................................................................ Y e a r s th e r e :
C ity :
................................................................................
S t a te : — ....................... ............. Z ip : ............. ...... ........
Soc ia l S e c u rity N o . : .............. ...................................................................................
D r i v e r ’s L ic en se N o . : .
P re v io u s S tre e t A d d re s s : .......................... ........... ............................................................................................ ........ .
S ta te ; .
C ity: ............ .......................................................
P re sen t E m p lo y e r .........................................
.......................
. Y e a ts th e re :
Z ip:
....................... Y e a rs th e re :
.............
P o s itio n o r tit le : .............. ...................................................... ....... ........................ N u n * o f supe>-vlsor:
E m p lo y e r 's A d d re s s : ........................................................................................... ........................................ ...........
P re v io u s E m p lo y e r : ............................................... ........................ ................................ ..................................................... .................................... Y e a n t h e re :
P re v io u s E m p lo y e r 's A d d re s s : ..... .............................................................................................................. .......................................................................................
P re se n t n e t s a la r y o r c o m m issio n : $ ......................... p e r .............................. N o . D e p e n d e n ts: ...................... A g e s : .................................................
f need not N revealed If yon d o not * 1 * to have It considered as i
. . . .
for repaying this obligation.
A lim o n y . chU d s u p p o r t, s e p a r a te m a in te n a n c e
rec eiv e d u n d e r : c o u r t o r d e r □
O th e r in c o m e : $.............. .................... p e r .
, S o u rced )
w ritte n
□
o r a l u n d e rs ta n d in g Q
o f o th e r In co m e :
Is a n y in c o m e lis ted in th is S e c tio n lik e ly t o b e re d u c e d b e fo r e th e c re d it re q u e ste d Is p a id o ff?
□
Y e s ( E x p la in In d e tail o n a se p a r a te s h e e t. ) N o □
H a v e y o u e v e r r e c eiv e d c rc d it f r o m u s? ...................... - ...... W h e n ? ................................................. O ffice: ..........
C h e c k in g A c c o u n t N o ..............
N a m e o f n e a r e s t rela tiv e
R e la tio n s h ip : .......................... .
S E C T I O N B — I N F O R M A T IO N R E G A R D I N G J O I N T A P P L I C A N T O R O T H E R P A R T Y ( U s e s e p a r a t e sh e e ts If n e c e s s a r y .)
Full N a m e ( L a s t, F irst, M id d l e ) : ..............:........................... ~................................................................................ ................... ~................
B i rth d a te :
/
R e la tio n s h ip t o A p p lic a n t ( I f a n y ) : ....................... ................ ............................................................................ ....... ............. ...................... ............................... .
P re sen t S tre e t A d d re s s : ............................................................................................................................................................................................. Y e a rs th e re :
C ity :
.............................. ....................................... ...... ....... S ta te : .........................................
.....
Z i p ........ ...........T e l e p h o n e : .............................. ...........................
Social S e c u rity N o . : ................................ ..................... .......................................... D riv e r ’s L ic en se N o . : .....................................................................................
P re se n t E m p lo y e r : i................ ................................................................................... Y e a rs th e r e : ...................... T e l e p h o n e : ...................................................
P o s itio n o r ti t l e : .....................:.......................... ........................................................ N a m e o f s u p e rv iso r: .....................................................................................
E m p lo y e r’s A d d re s s :
........................................—............................................................................ ................................... .................... ................... — .............................
P re v io u s E m p lo y e r: ............. ...... ...................... .........- ........................................ ............................................................................. ........................ Y e a r s t h e r e :
....
P re v io u s E m p lo y e r ’s A d d re s s : ................. ...... ................................ .................................................................................................... ......................... ................................................................................................................
P re se n t n e t sa la r y o r c o m m issio n : I
p e r ....... .................... N o . D e p e n d e n ts:
A g es:
...
________ _________
[ inmate need aot be revealed If yea do net wish to have H considered as a bests
A lim o n y , c h ild s u p p o r t, se p a r a te m a in te n a n c e r e c eiv e d u n d e r: c o u r t o r d e r
O th e r in c o m e : $.................................... p e r ........
...................
n
w ritte n a g re e m e n t
□
o r a l u n d e rs ta n d in g
□
S o u r c c ( s ) o f o th e r in c o m e : ................................................ .......................................
I s a n y in c o m e lis te d in t h i s S e c tio n lik e ly t o be r ed u c ed b e fo r e th e c rc d it r eq u e ste d is p a id off?
Q Y e s ( E x p la in in d e tail o n a se p a r a te s h e e t.) N o □
C h e c k in g A c c o u n t N o . : ...................... ...................................................................
In s titu tio n a n d B r a n c h : ..................
Savings A c c o u n t N o .: ................................................................ .............................. I n s titu tio n a n d B r a n c h : ................
N a m e o f n e a r e s t re la tiv e n o t living w ith J o i n t
A p p lic a n t o r O th e r P a r ty : ............................................ ............................ ................................................................................... . .
R e la tio n sh ip :
......................... ........................ .............................................................. A d d r e s s : .............................................................................................. ....
S E C T IO N C —M A R I T A L S T A T U S
A p p lic a n t : □ M a r r ie d
□
O th e r P a r ly :
□ M a r r ie d
S e p a ra te d
□
S e p a ra te d
□
U n m a rr ie d (in c lu d in g s in g le, d iv o r c e d , a n d w id o w e d )
□
U n m a rr ie d (in c lu d in g sin g le, d iv o rc e d , a n d w id o w e d )
21
Appendix B
Regulation B
S E C T I O N D — A S S E T A N D D E B T I N F O R M A T I O N ( I f S e c tio n B h a s b een c o m p le te d , th is S e c tio n s h o u ld b e c o m p le te d giv ing
in f o r m a tio n a b o u t b o lh (he A p p lic a n t a n d J o in t A p p lic a n t o r O th e r P e r s o n . Please m ark A n p Jic an t-rela te d in f o r m a
tio n w ith a n " A . " I f S e c tio n B w as n o t c o m p le te d , o n ly g iv e in f o r m a tio n a b o u t th e A p p lic a n t in th is S e c tio n .)
A S S E T S O W N E D ( U s e s e p a r a t e s h e e t if n e c e ssa ry .)
D es c r ip tio n o f A sse ts
S u b je c t t o D e b t?
Y es/N o
V alu e
C ash
N a m e ( s ) o f O w ncr(x)
$
A u to m o b il e s ( M a k e , M o d e l, Y e a r)
C a s h V a lu e o f L ife In s u ra n c e {Issuer,
F a c e V alu e)
R e a l E s ta te ( L o c a tio n , D a te A c q u ire d )
M a r k e ta b le S e c u ritie s ( Is s u e r , T y p e , N o . o f S h a r e s )
O th e r ( L is t)
T o ta l A sse ts
S
O U T S T A N D I N G D E B T S ( I n c lu d e c h a r g e a cc o u n ts, in sta lm e n t c o n tra c ts,
n e c e ssa ry .)
T ype o f D ebt
o r A cc t. N o .
C r e d ito r
1.
( L a n d lo r d o r
M o rtg a g e H o ld e r )
□
□
c re d it c a r d s ,
N a m e in W h ich
A cc t. C a rrie d
R ent P a y m e n t
M o rtg a g e
r e n t, m o rtg a g es, etc.
O rig in a l
D ebt
Pre sen t
B a la n ce
U se
se p a r a te
M o n th ly
P a y m e n ts
s h e e t if
P a st D ue?
Y e s/N o
$ ( O m it r e n t) $ (O m it re n t) S
2.
3.
'?
..................
1
s
■
T o ta l D e b ts
( C r e d it R e fe re n c e s)
H a v e y o u b e e n d e c la re d
b a n k r u p t in th e la s t 14 y e ars?
O th e r o b lig a tio n s — ( E .g ., lia b ility to p a y a lim o n y , c h ild su p p o r t, se p a ra te
S E C T IO N
m a in te n a n c e . U s e se p a ra te sh e et if n e ce ssary .)
E — S E C U R E D C R E D I T B riefly d e scrib e th e p ro p e rty to b e g iv e n a s se cu rity :
a n d list n a m e s a n d a d d re sses o f a ll c o -o w n ers o f th e p ro p e r ty :
N am e
I f th e se c u r ity is r e a l e s ta t e , give th e full n a m e o f y o u r s p o u se (if a n y ):
E v e ry th in g th a t I h a v e s ta te d in this a p p lic a tio n Is c o rr e c t to th e best o f m y k n o w led g e. I u n d e rsta n d th a t y o u w ill reta in
t h i s a p p lic a tio n w h e th e r o r n o t it is a p p ro v e d . Y o u a r e a u th o riz e d to c h e c k m y c rc d it a n d e m p lo y m e n t h is to ry a n d t o a n sw e r q u e s
t io n s a b o u t y oui c r e d it e x p erien c e w ith me.
A p p lic a n t’s S ig n a tu r e
22
O th e r S ig n atu re
( W h e re A p p lic ab le)
Regulation B
Appendix B
[Closed-end, unsecured/secured credit]
CREDIT APPLICATION
I M P O R T A N T : R e ad ( h e w D ire c tio n * b e f o r e c o m p le tin g th is A p p lic a tio n .
Check
A p p r o p r ia te
Box
O H
y o u a re a p p ly in g fo r in d iv id u al c re d it in y o u r o w n n a m e a n d a re rely in g o n y o u r o w n In co m e o r a sse ts
a n a n o t th e in c o m e o r a sse ts o f a n o th e r p e rs o n a s th e b a sis f o r re p a y m e n t o f the c r e d it re q u e s te d , c o m P*c l® 0lily S e c tio n s A a n d D . I f th e r e q u e ste d c r c d it is t o b e s e c u r e d , a ls o c o m p le te th e first p a r t o f
S e c tio n C a n d S e c tio n E.
□
I f y o u a r e a p p ly in g fo r j o i n t c re d it w ith a n o th e r p e rs o n , c o m p le te a ll S e c tio n s e x c e p t E , p r o v id in g in f o r m a
tio n in B a b o u t th e jo in t a p p lic a n t. I f th e r e q u e ste d c re d it is t o be s e c u r e d , th e n c o m p le te S e c tio n E .
□
I f y o u a r e a p p ly in g fo r in d iv id u a l c re d it, b u t a re r e ly in g o n In c o m e f r o m a lim o n y , c h ild s u p p o r t, o r s e p a
r a te m a in te n a n c e o r o n th e in c o m e o r a sse ts o f a n o t h e r p e r s o n a s th e b a sis f o r re p a y m e n t o f th e c r e d it
r e q u e ste d , c o m p le te ail S e c tio n s e x c e p t E to th e e x te n t p o ssib le , p r o v id in g in f o r m a t io n in B a b o u t th e
p e rso n o n w h o se a lim o n y , s u p p o r t, o r m a in te n a n c e p a y m e n ts o r in c o m e o r a s s e ts y o u a r e rely in g . I f th e
r e q u e ste d c re d it is t o b e se c u re d , th e n c o m p le te S e c tio n E .
A m o u n t R e q u e s te d
P a y m e n t D a t e D esire d
P r o c e e d s o f C r c d it
S E C T IO N A — IN F O R M A T IO N R E G A R D IN G A P P L IC A N T
/
P r e se n t n e t sa la r y o r c o m m issio n : $ .....................
ice In co m e n e e d n o t b e r e v e a le d if y o u d o n o t w ish t e h a v e K c o n s id e r e d a s a b a sis
A lim o n y , c h ild s u p p o r t, se p a r a te m a in te n a n c e
r e c eiv e d u n d e r: c o u rt o r d e r
□
w ritte n a g re e m e n t
□
o r a l u n d e rs ta n d in g
□
Is a n y in c o m e lis ted in th is S e c tio n lik e ly t o be re d u c e d b e fo r e th e c r e d it r e q u e ste d is p a id o ff?
□
Y e s ( E x p la i n in d e tail o n se p a ra te sh e e t.)
□
No
H a v e y o u e v e r r e c eiv e d c r e d it f ro m u s? ........... ................. W h e n ? .................................................. O ffice
....................................................................
N a m e o f n e a r e s t rela tiv e
S B C T I O N ■ — I N F O R M A T I O N R E G A R D I N G J O I N T A P P L I C A N T O R O T H E R P A R T Y ( U s e s e p a r a t e sh e e ts if n e c e s s a r y .)
/
P re v io u s E m p lo y e r 's A d d re s s : ...................................
P re se n t n e t sa la r y o r c o m m issio n :
S..................
A lim o n y , c hild s e p p o rt, or se p a r a te m a in te n a n c e in c o m e n e e d n o t b e re v e a le d if jo m d o n o t w ish t o h a v e It c o n s id e r e d a s a b a sis
f o r re p a y in g th is o M ig a tle a .
A lim o n y , c h ild su p p o r t, se p a r a te m a in te n a n c e
rec eiv e d u n d e r:
c o u rt o rd er
□
w ritte n a g re e m e n t
Is a n y in c o m e lis ted in th is S e c tio n lik e ly t o b e re d u c e d b e fo r e th e c r e d it r e q u e ste d is p a id off7
□
Y e s ( E x p la i n i n d e ta il o n se p a ra te sh e et.)
□
No
S a vings A c c o u n t N o .: ................................................
N a m e o f n e a re st relative n o t liv ing w ith
A ilitrjn
□
o r a l u n d e rs ta n d in g
□
Appendix B
Regulation B
S E C T IO N C — M A R I T A L S T A T U S
( D o a o t c o m p le te If t b i t I* a n a p p lic a tio n f o r In d iv id u a l u n s e c u r e d c re d it.)
A p p lic a n t- □
M a r r ie d
Q S e p a ra te d
□
U n m a rr ie d (in c lu d in g tin g le , d iv o rc e d , a n d w id o w ed )
O th e r P a r ty : □
M a rr ie d
□ S e p a ra te d
□
U n m a rr ie d ( in c lu d in g sin g le, d iv o rce d , a n d w id o w e d )
S E C T IO N D — A S S E T A N D D E B T I N F O R M A T IO N ( I f S e c tio n B h a s b e e n c o m p le te d , this S e c tio n sh o u ld b e c o m p le te d giv ing
in f o r m a tio n a b o u t b o th th e A p p lic a n t a n d J o in t A p p lic a n t o r O th e r P e rso n . Plea se m a rk A p p lic a n t-r e la te d in f o r m a tio n
w ith a n “ A .” I f Se c tio n B w a s n o t c o m p le te d , o n ly give in f o r m a tio n a b o u t th e A p p lic an t in th is S e c tio n .)
A S S E T S O W N E D ( U s e s e p a r a t e s h e e t If n e c e s s a r y .)
____________________ ______________________________ _______________________________
S u b jec t to D e b t?
Y es/N o
V alu e
D e sc r ip tio n o f A ssets
C ash
N a m e (s) o f O w n er(s)
S
A u to m o b ile s ( M a k e , M ode l, V e a r)
C a s h V a lu e o f L if e I n s u ra n c e "(Issuer,
F a c e V a lu e )
feeaJ E s ta te ( L o c a tio n , D a te A c q u ire d )
M a rk e ta b le S e c u ritie s (Is s u e r . T y p e . N o . o f S h a r e s )
O th e r ( L is t)
T o ta l A ssets
$
O U T S T A N D I N G D E B T S (In c lu d e c h arg e a cc o u n ts, in s ta lm e n t c o n tra c t s ,
n e c e s s a r y .)
C r e d ito r
1.
( L a n d lo r d o r
M o rtg a g e H o ld e r )
T ype o f D ebt
o r A cc t. N o.
□
□
c re d it c a r d s ,
R em Paym ent
M ortg a g e
r e n t, m o rtg a g es, etc.
O rig in a l
D ebt
N a m e in W h ich
A cc t. C a rrie d
U se se p a r a te
M o n th ly
P a y m e n ts
P re sen t
B a la n ce
$ (O m it ren t)
$ ( O m it ren t)
$
$
i
1
s h e e t if
P a st D u e?
Y e s/N o
i.
3.
T o ta l D eb ts
1C r e d it R efere n ce s)
-
D
•ale P a id
f
27
A r e y o u a c o -m a k e r , e n d o rs e r, o r
g u a ra n to r on any loa n o r c o n tra c t ?
Yea □
No □
I f “ Y es.”
f o r w h o m ? ____________________________T o w h o m ?
A re th e re a n y u n sa tisfie d
Y es Q
I f “ Y es,”
ju d g m e n ts a g a in st y o u ? _______________ N o U ________ A m o u n t $_________________________t o w h o m o w ed ?
H a v e y o u b e e n d e c la re d
Y es Q
If " Y e s , ”
b a n k r u p t in t h t la s t 14 y e ars? _________ N o □ _______w h ere? ________________________________________________
Y ear
O th e r o b lig a tio n s— ( E .g ., lia b ility t o pay a lim o n y , ch ild su p p o rt, s e p a r a t e m a in te n a n c e . U se se p a r a te sh eet if n e ce ssary .)
S E C T IO N E — S E C U R E D C R E D I T (C o m p le te o n ly If c re d it is t o b e se cu red .) B riefly d e sc rib e th e p r o p e r ty t o b e g iv e n as se c u rity :
a n d list n a m e s a n d a d d rc s s e i o f a ll co -o w n ers o f th e p ro p e r ty :
N am e
A d d ic ts
I f the s e c u rity is re a l e s ta t e , give the fu ll n a m e o f y o u r sp o u se ( i f a n y ) :
E v ery th in g th a t I h a v e sta te d in this a p p lic a tio n is c o rr e c t to th e b e st o f m y k n o w led g e. I u n d e rsta n d th a t y o u w in r e ta in
th is a p p lic a tio n w h e th e r o r n o t i t is a p p ro v e d . Y o u a r e a u th o riz e d to c h ec k m y c re d it a n d e m p lo y m e n t h isto ry a n d t o a n sw e r q u e s
tio n s a b o u t y o u r c re d it e x p erien c e w ith me.
A p p lic a n t’s S ig n atu re
D ate
O th e r S ig n atu re
( W h e re A p p lic a b le )
D ate
Appendix B
Regulation B
[Community property]
CREDIT APPLICATION
I M P O R T A N T ! R e a d t h e ie D irec tio n * b e f o r e c o m p le tin g th is A p p lic atio n .
C h e ck
A p p ro p r ia te
Box
A m o u n t R e q u e s te d
□
If
□
I n all o th e r situ a tio n s, c o m p le te all Sectio n * ex ce p t E , p r o v id in g in f o r m a t io n i n B a b o u t y o u r sp o u se , a
jo in t a p p lic a n t o r u se r, o r th e p e r s o n o n w h o se a lim o n y , s u p p o r t, o r m a in te n a n c e p a y m e n ts o r in c o m e o r
a ssets y o u a re rely in g . If th e r e q u e ste d c re d it is to be s e c u r e d , a ls o c o m p le te S e c tio n E .
y o u a r e a p p ly in g fo r In d iv id u a l c re d it in y o u r o w n n a m e , a r e n o t m a rr ie d , a n d a r e n o t r e ly in g o n alim o n y ,
ch ild s u p p o r t, o r s e p a r a t e m a in te n a n c e p a y m e n ts o r o n the in c o m e o r a sse ts o f a n o th e r p e rso n as th e b a si s
f o r r e p a y m e n t o f th e c r e d it r e q u e ste d , c o m p le te o n ly S e c tio n s A a n d D . I f th e re q u e ste d c r e d it is to be
se c u re d , a lso c o m p le te S e c tio n E.
P a y m e n t D a t e D e sire d
P ro c ee d s o f C r e d it
S E C T IO N A— IN F O R M A T IO N R E G A R D IN G A P P L IC A N T
/
P o s itio n o r title :
P re v io u s
............................................................
E m p lo y e r :
.
.................... ....................... .........
P r e se n t n e t sa la r y o r c o m m issio n : | ......................
per
. N o . D e p e n d e n ts: .................... A g e s : .........................................................
AUaaony, c h ild su p p o r t, o r s e p a r a t e m a i r i t a a i ice In c o m e n e e d n o t b e r e v e ale d I f y o a d o s o t w ish t o h a v e It c o n s id e r e d a s a b a sis
f o r r e p a y in g th is o b lig a tio n .
A lim o n y , c h ild s u p p o r t, se p a r a te m a in te n a n c e rec eive d u n d e r:
c o u rt o rd er □
w ritte n a g re em e n t □
o r a l u n d e rs t a n d in g □
1» a n y in c o m e lis ted in th is S e c tio n likely t o be re d u c e d in th e n e x t tw o y e a r s o r b e fo r e th e c r e d it r e q u e ste d is p a id o ff?
□
Y es ( E x p la i n in d e tail o n a s e p a r a t e s h e e t.) N o □
S E C T I O N B — I N F O R M A T I O N R E G A R D I N G S P O U S E , J O I N T A P P L I C A N T , U S E R , O R O T H E R P A R T Y ( U s e s e p a r a t e sh e e ts If
ne ce ssary .)
C i ty : ......................................................................................
P r e s e n t n e t sa la ry o r c o m m issio n : $ .......................
p e r ............................ N o . D e p e n d e n ts :
A g e s : ..................
A H m ony, ch ild n p p o r t , o r se p a r a te B taia te n aa c e In c o m e n e e d n o t b e r e v e a le d If y o u d o n o t w ish t o h a v e It c o n s id e r e d a s a
f o r re p a y in g th is o b lig a tio n .
A lim o n y , c h ild su p p o rt, se p a r a te m a in te n a n c e
rec eive d u n d e r:
c o u rt o r d e r
□
w ritte n a g re e m e n t
□
o r a l u n d e rs t a n d in g
□
l a a n y in c o m e lis ted in th is S e c tio n likely to be re d u c e d in th e n e x t tw o y e a r s o r b e fo r e th e c r e d it re q u e s te d is p a id off?
□
Y e s ( E x p la i n i n d e ta il o n a s e p a r a t e s h e e t.) □ N o
S a v in g s A c c o u n t N o .: ....................................................
N a m e o f n e a re st relative n o t living w ith
S p o u s e , J o i n t A p p lic a n t, U se r , c r o th e r P a r ty : ............ .................................................... .............................................
T e le p h o n e :
25
Regulation B
Appendix B
S E C T IO N C — M A R I T A L S T A T U S
A p p lic a n t: □
O th e r P a r ly :
M a rr ie d
□ M a rr ie d
□
□
S e p a ra te d
S e p a ra te d
□
U n m a rr ie d ( in c lu d in g s in g le, d iv o rc e d , a n d w id o w e d )
□
U n m a rr ie d (In c lu d in g single, d iv o rc e d , w id o w e d )
S E C T IO N D — A S S E T A N D D E B T I N F O R M A T IO N ( I f S e c tio n B h a s b e e n c o m p le te d , th is Se c tio n s h o u ld b e c o m p le te d giv in g
i n c l i n a t i o n a b o u t b o th the A p p lic a n t a n d S p o u s e , J o in t A p p lic a n t, U se r , o r O th e r P erso n . Plea se m a rk A p p lic a n tre la te d in f o r m a tio n w ith a n " A . " If S e c tio n B w a s n o t c o m p le te d , o n ly g iv e in f o r m a tio n a b o u t the A p p lic a n t in th is
S e c tio n .)
A S S E T S O W N E D ( U s e se p a r a te s h e e t if n e ce ssary .)
D e sc r ip tio n o f A ssels
V alu e
C a sh
S u b je c t to D e b t?
Y es/N o
N a m c (s) o f O w n er(s)
$
A u to m o b ile s ( M a k e , M o d e l, Y e a r)
C a sh V a lu e o f L ife In s u ra n c e (Iss u er,
Fa c e V alu e)
R e a l E s ta te 4L o c a tio n , b a t e A c q u ire d )
M a rk e ta b le S e c u ritie s (Is s u e r , T y p e , N o . o f S h a re s)
O th e r ( L is t)
T o ta l A sse ts
i
O U T S T A N D I N G D E B T S ( In c lu d e c h a r g e a c c o u n ts , in stalm en t c o n tra c ts ,
n e c e ssa r y .)
N am e o f C re d ito r
1.
I
( L a n d lo r d o r
M o r tg a g e H o ld e r)
T ype o f D ebt
o r A cc t. N o.
□
□
c r e d it c ard s,
O rig in a l
D ebt
N a m e in W h ich
A cc t. C a r rie d
R ent Paym ent
M o rtg a g e
re n t,
m o rtg a g es, etc.
U se
se p a r a te
M o n th ly
P a y m e n ts
P re sen t
B a la n ce
$ (O m it ren t)
$ ( O m it r e n t)
$
I
i
$
s h e e t if
P a st D u e ?
Y es/N o
.......................
3.
n ro tS T D S ts -
(C re d it R efere n ce s)
A r e y o u a c o -m a k e r, e n d o rs e r, o r
g u a ra n to r o n any lo a n o r c o n tra c t?
Y es □
No □
ju d g m e n ts ag ain st you?
Y es n
No n
A m ount $
H a v e you b e e n d e cla re d
b a n k ru p t in tlic last 14 years
Y es Q
No n
I f ■•yes,"
w h ere?
I f " y e s ,"
f o r w hom ?
T o w hom ?
jo w h o m o w ed -’
O th e r o b lig a tio n s— ( E .g ., L ia b ility to p a y a lim o n y , c h ild su p p o rt, s e p a r - t o m a in te n a n c e . U se se p a ra te sh e et if n e c e ssa ry .)
S E C T IO N E — S E C U R E D C R E D I T (C o m p le te o n ly if c re d it is to be s e c u r e d .) BrieRy d e sc rib e th e p ro p e rly t o b e g iv e n a s se c u rity :
a n d list n a m e s a n d a d d re s s e s o f all co -o w n ers o f th e p r o p e r ty :
E v e ry th in g th a t I h a v e sta te d in this a p p lic a tio n is c o rr e c t to th e b e st o f m y k n o w le d g e. I u n d e rs ta n d th a t y o u w ill reta in
th is a p p lic a tio n w h eth er o r n o t it is a p p ro v e d . Y o u a r e a u th o riz e d t o c h c c k m y c re d it a n d e m p lo y m e n t h isto ry a n d t o a n sw e r q u e s
tio n s a b o u t y o u r c r e d it e x p erien c e w ith m e.
A p p lic a n t 's S ig n a tu re
26
Regulation B
Appendix B
[Residential real estate mortgage loan]
RESIDENTIAL LOAN APPLICATION
27
Appendix B
28
Regulation B
Regulation B
A P P E N D IX C— Sam ple N otification
Forms
This appendix contains nine sample notifica
tion forms. Forms C -l through C-4 are in
tended for use in notifying an applicant that
adverse action has been taken on an applica
tion or account under section 202.9(a)(1) and
(2)(i) of this regulation. Form C-5 is a notice
of disclosure of the right to request specific
reasons for adverse action under section
202.9(a)(1) and (2)(ii). Form C-6 is designed
for use in notifying an applicant, under sec
tion 202.9(c)(2), that an application is incom
plete. Forms C -l and C-8 are intended for use
in connection with applications for business
credit under section 202.9(a)(3). Form C-9 is
designed for use in notifying an applicant of
the right to receive a copy of an appraisal
under section 202.5a.
Form C -l contains the Fair Credit Report
ing Act disclosure as required by section
615(a) and (b) of that act. Forms C-2 through
C-5 contain only the section 615(a) disclosure
(that a creditor obtained information from a
consumer reporting agency that played a part
in the credit decision). A creditor must pro
vide the section 615(a) disclosure when ad
verse action is taken based on information
from an outside source other than a consumer
reporting agency. In addition, a creditor must
provide the 615(b) disclosure if the creditor
obtained information from an affiliate other
than information in a consumer report or other
than information concerning the affiliate’s own
transactions or experiences with the consumer.
Creditors may comply with the disclosure re
quirements for adverse action based on infor
mation in a consumer report obtained from an
affiliate by providing either the 615(a) or
615(b) disclosure.
The sample forms are illustrative and may
not be appropriate for all creditors. They were
designed to include some of the factors that
creditors most commonly consider. If a credi
tor chooses to use the checklist of reasons
provided in one of the sample forms in this
appendix and if reasons commonly used by
the creditor are not provided on the form, the
creditor should modify the checklist by substi
tuting or adding other reasons. For example, if
“inadequate downpayment” or “ no deposit re
lationship with us” are common reasons for
taking adverse action on an application, the
Appendix C
creditor ought to add or substitute such rea
sons for those presently contained on the
sample forms.
If the reasons listed on the forms are not
the factors actually used, a creditor will not
satisfy the notice requirem ent by sim ply
checking the closest identifiable factor listed.
For example, some creditors consider only
references from banks or other depository in
stitutions and disregard finance company ref
erences altogether; their statement of reasons
should disclose “ insufficient bank references,”
not “insufficient credit references.” Similarly,
a creditor that considers bank references and
other credit references as distinct factors
should treat the two factors separately and
disclose them as appropriate. The creditor
should either add such other factors to the
form or check “ other” and include the appro
priate explanation. The creditor need not,
however, describe how or why a factor ad
versely affected the application. For example,
the notice may say “ length o f residence”
rather than “ too short a period of residence.”
A creditor may design its own notification
forms or use all or a portion o f the forms
contained in this appendix. Proper use of
Forms C -l through C-4 will satisfy the re
quirement of section 202.9(a)(2)(i). Proper use
of Forms C-5 and C-6 constitutes full compli
ance w ith section s 2 0 2 .9 (a)(2 )(ii) and
202.9(c)(2), respectively. Proper use of Forms
C -l and C-8 will satisfy the requirements of
section 202.9(a)(2)(i) and (ii), respectively, for
applications for business credit. Proper use of
Form C-9 will satisfy the requirements of sec
tion 202.5a of this part.
Form C - l — Sam ple N o tice o f A ction
Taken and Statement o f R easons
Statement of Credit Denial, Termination,
or Change
Date
Applicant’s N am e:________________________
Applicant’s A ddress:______________________
Description of Account, Transaction, or
Requested Credit:
Description of Action Taken:
29
Appendix C
Regulation B
P a rt / — PR IN C IPA L R E A SO N (S) F O R
C R E D IT D EN IA L, T E R M IN A T IO N , OR
O THER ACTION TAKEN CONCERNING
C RED IT This section must be completed in
all instances.
Credit application incomplete
Insufficient number of credit references
provided
____ Unacceptable type of credit references
provided
____ Unable to verify credit references
____ Temporary or irregular employment
____ Unable to verify employment
____ Length of employment
____ Incom e insufficient for am ount of
credit requested
____ Excessive obligations in relation to
income
____ Unable to verify income
____ Length of residence
____ Temporary residence
____ Unable to verify residence
____ No credit file
____ Limited credit experience
____ Poor credit performance with us
____ Delinquent past or present credit obli
gations with others
____ Garnishment, attachment, foreclosure,
rep ossession, collectio n action, or
judgment
____ Bankruptcy
____ Value or type o f collateral not
sufficient
____ Other, specify:______________________
agency. The reporting agency played
no part in our decision and is unable to
supply specific reasons why we have
denied credit to you. You also have a
right to a free copy of your report from
the reporting agency, if you request it
no later than 60 days after you receive
this notice. In addition, if you find that
any information contained in the report
you receive is inaccurate or incomplete,
you have the right to dispute the matter
with the reporting agency.
____
____
Part //— DISCLOSURE OF USE OF INFOR
MATION OBTAINED FROM AN OUTSIDE
SOURCE. This section should be completed if
the credit decision was based in whole or in
part on information that has been obtained
from an outside source.
____
30
Our credit decision was based in whole
or in part on information obtained in a
report from the consum er reporting
agency listed below. You have a right
under the Fair Credit Reporting Act to
know the information contained in your
credit file at the consumer reporting
N am e:_____________________________
A ddress:___________________________
[Toll-free] Telephone number:
____
Our credit decision was based in whole
or in part on information obtained from
an affiliate or from an outside source
other than a consu m er reporting
agency. Under the Fair Credit Report
ing Act, you have the right to make a
written request, no later than 60 days
after you receive this notice, for disclo
sure o f the nature of this information.
I f you have any questions regarding this no
tice, you should contact:
Creditor’s nam e:__________________________
Creditor’s address:________________________
Creditor’s telephone num ber:______________
NOTICE: The federal Equal Credit Opportu
nity Act prohibits creditors from discriminat
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari
tal status, age (provided the applicant has the
capacity to enter into a binding contract); be
cause all or part of the applicant’s income
derives from any public assistance program;
or because the applicant has in good faith
exercised any right under the Consumer Credit
Protection Act. The federal agency that admin
isters compliance with this law concerning
this creditor is (name and address as specified
by the appropriate agency listed in appendix
A).
Regulation B
Appendix C
Form C -2— Sam ple N otice o f A ction
Taken and Statem ent o f Reasons
Date
Dear Applicant:
Thank you for your recent application. Your
request for [a loan/a credit card/an increase in
your credit limit] was carefully considered,
and we regret that we are unable to approve
your application at this time, for the following
reason(s):
Your Income:
____ is below our minimum requirement.
____ is insufficient to sustain payments on
the amount of credit requested.
____ could not be verified.
Your Employment:
____ is not of sufficient length to qualify.
____ could not be verified.
Your Credit History:
____ of making payments on time was not
satisfactory.
____ could not be verified.
Your Application:
____ lacks a sufficient number of credit ref
erences.
____ lacks acceptable types of credit refer
ences.
____ reveals that current obligations are ex
cessive in relation to income.
O ther:________________________________
The consumer reporting agency contacted
that provided information that influenced our
decision in whole or in part was [name, ad
dress and [toll-free] telephone number of the
reporting agency]. The reporting agency is un
able to supply specific reasons why we have
denied credit to you. You do, however, have a
right under the Fair Credit Reporting Act to
know the information contained in your credit
file. You also have a right to a free copy of
your report from the reporting agency, if you
request it no later than 60 days after you
receive this notice. In addition, if you find
that any information contained in the report
you receive is inaccurate or incomplete, you
have the right to dispute the matter with the
reporting agency. Any questions regarding
such information should be directed to [con
sumer reporting agency].
If you have any questions regarding this
letter, you should contact us at [creditor’s
name, address and telephone number].
NOTICE: The federal Equal Credit Opportu
nity Act prohibits creditors from discriminat
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari
tal status, age (provided the applicant has the
capacity to enter into a binding contract); be
cause all or part o f the applicant’s income
derives from any public assistance program;
or because the applicant has in good faith
exercised any right under the Consumer Credit
Protection Act. The federal agency that admin
isters compliance with this law concerning
this creditor is (name and address as specified
by the appropriate agency listed in appendix
A).
Form C -3— Sam ple N o tice o f A ction
Taken and Statem ent o f R easons (Credit
Scoring)
Date
Dear Applicant:
Thank you for your recent application for
_______________________ We regret that we
are unable to approve your request.
Your application was processed by a credit
scoring system that assigns a numerical value
to the various items of information we con
sider in evaluating an application. These nu
merical values are based upon the results of
analyses of repayment histories of large num
bers of customers.
The information you provided in your ap
plication did not score a sufficient number of
points for approval of the application. The
reasons you did not score well compared with
other applicants were:
•
•
•
Insufficient bank references
Type o f occupation
Insufficient credit experience
In evaluating your application the consumer
reporting agency listed below provided us
with information that in whole or in part in
fluenced our decision. The reporting agency
played no part in our decision other than pro
viding us with credit information about you.
Under the Fair Credit Reporting Act, you have
a right to know the information provided to
31
Appendix C
Regulation B
us. It can be obtained by contacting: [name,
address, and [toll-free] telephone number of
the consumer reporting agency]. You also
have a right to a free copy of your report
from the reporting agency, if you request it no
later than 60 days after you receive this no
tice. In addition, if you find that any informa
tion contained in the report you receive is
inaccurate or incomplete, you have the right
to dispute the m atter with the reporting
agency.
If you have any questions regarding this
letter, you should contact us at
Creditor’s N am e:_______________________
A ddress:_______________________________
Telephone:_____________________________
Sincerely,
NOTICE: The federal Equal Credit Opportu
nity Act prohibits creditors from discriminat
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari
tal status, age (with certain limited excep
tions); because all or part of the applicant’s
income derives from any public assistance
program; or because the applicant has in good
faith exercised any right under the Consumer
Credit Protection Act. The federal agency that
administers compliance with this law concern
ing this creditor is (name and address as
specified by the appropriate agency listed in
appendix A).
Form C -4— Sam ple N otice o f A ction
Taken, Statement o f R easons, and
Counteroffer
Date
Dear Applicant:
T hank you for your application for
______________________ . We are unable to
offer you credit on the terms that you re
quested for the following reason(s):
We can, however, offer you credit on the
following term s:__________________________
If this offer is acceptable to you, please notify
us within [amount of time] at the following
address:_______________________________
32
Our credit decision on your application was
based in whole or in part on information ob
tained in a report from [name, address and
[toll-free] telephone number of the consumer
reporting agency]. You have a right under the
Fair Credit Reporting Act to know the infor
mation contained in your credit file at the
consum er reporting agency. The reporting
agency played no part in our decision and is
unable to supply specific reasons why we
have denied credit to you. You also have a
right to a free copy of your report from the
reporting agency, if you request it no later
than 60 days after you receive this notice. In
addition, if you find that any information con
tained in the report you receive is inaccurate
or incomplete, you have the right to dispute
the matter with the reporting agency.
You should know that the federal Equal
Credit Opportunity Act prohibits creditors,
such as ourselves, from discriminating against
credit applicants on the basis of their race,
color, religion, national origin, sex, marital
status, age because they receive income from
a public assistance program, or because they
may have exercised their rights under the
Consumer Credit Protection Act. If you be
lieve there has been discrimination in handling
your application you should contact the [name
and address of the appropriate federal enforce
ment agency listed in appendix A].
Sincerely,
Form C -5— Sam ple D isclosure o f Right
to R equest Specific Reasons for Credit
D enial
Date
Dear Applicant:
Thank you for applying to us f o r ________ .
After carefully reviewing your application,
we are sorry to advise you that we cannot
[open an account for you/grant a loan to you/
increase your credit limit] at this time.
If you would like a statement of specific
reasons why your application was denied,
please contact [our credit service manager]
shown below within 60 days of the date of
this letter. We will provide you with the state
ment of reasons within 30 days after receiving
your request.
Regulation B
Appendix C
Creditor’s Name
Address
Telephone number
Date
Dear Applicant:
If we obtained information from a con
sumer reporting agency as part of our consid
eration of your application, its name, address,
and telephone number is shown below. The
reporting agency played no part in our deci
sion and is unable to supply specific reasons
why we have denied credit to you. [You have
a right under the Fair Credit Reporting Act to
know the information contained in your credit
file at the consumer reporting agency.] You
have a right to a free copy of your report
from the reporting agency, if you request it no
later than 60 days after you receive this no
tice. In addition, if you find that any informa
tion contained in the report you receive is
inaccurate or incomplete, you have the right
to dispute the m atter with the reporting
agency. You can find out about the informa
tion contained in your file (if one was used)
by contacting:
Consumer reporting agency’s name
Address
Telephone number
Sincerely,
NOTICE: The federal Equal Credit Opportu
nity Act prohibits creditors from discriminat
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari
tal status, age (provided the applicant has the
capacity to enter into a binding contract); be
cause all or part of the applicant’s income
derives from any public assistance program;
or because the applicant has in good faith
exercised any right under the Consumer Credit
Protection Act. The federal agency that admin
isters compliance with this law concerning
this creditor is (name and address as specified
by the appropriate agency listed in appendix
A).
Form C -6— Sam ple N o tice o f Incom plete
A pplication and R equest for A dditional
Information
Creditor’s name
Address
Telephone number
Thank you for your application for credit.
The following information is needed to make
a decision on your application:_____________
We need to receive this inform ation by
(date)
If we do not receive it by
that date, we will regrettably be unable to
give further consideration to your credit
request.
Sincerely,
Form C-l — Sam ple N o tice o f A ction
Taken and Statement o f R easons
(B u sin ess Credit)
Creditor’s Name
Creditor’s address
Date
Dear Applicant:
Thank you for applying to us for credit. We
have given your request careful consideration,
and regret that we are unable to extend credit
to you at this time for the following reasons:
[Insert appropriate reason, such as
Value or type of collateral not sufficient
Lack of established earnings record
Slow or past due in trade or loan
payments]
Sincerely,
NOTICE: The federal Equal Credit Opportu
nity Act prohibits creditors from discriminat
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari
tal status, age (provided the applicant has the
capacity to enter into a binding contract); be
cause all or part o f the applicant’s income
derives from any public assistance program;
or because the applicant has in good faith
exercised any right under the Consumer Credit
Protection Act. The federal agency that admin
isters compliance with this law concerning
this creditor is [name and address as specified
by the appropriate agency listed in appendix
A],
33
Appendix C
Form C -8— Sam ple D isclosure o f Right
to R equest Sp ecific R easons for Credit
D enial G iven at Tim e o f A pplication
(B u siness Credit)
Creditor’s name
Creditor’s address
If your application for business credit is
denied, you have the right to a written state
ment of the specific reasons for the denial. To
obtain the statement, please contact [name, ad
dress and telephone number of the person or
office from which the statement of reasons
can be obtained] within 60 days from the date
you are notified of our decision. We will send
you a written statement of reasons for the
denial within 30 days of receiving your re
quest for the statement.
NOTICE: The federal Equal Credit Opportu
nity Act prohibits creditors from discriminat
ing against credit applicants on the basis of
race, color, religion, national origin, sex, mari
tal status, age (provided the applicant has the
capacity to enter into a binding contract); be
cause all or part o f the applicant’s income
derives from any public assistance program;
or because the applicant has in good faith
exercised any right under the Consumer Credit
Protection Act. The federal agency that admin
isters compliance with this law concerning
this creditor is [name and address as specified
by the appropriate agency listed in appendix
A],
Form C -9— Sam ple D isclosure o f Right
to R eceiv e a C opy o f an Appraisal
You have the right to a copy of the appraisal
report used in connection with your applica
tion for credit. If you wish a copy, please
write to us at the mailing address we have
Regulation B
provided. We must hear from you no later
than 90 days after we notify you about the
action taken on your credit application or you
withdraw your application.
[In your letter, give us the follow ing
information:]
A P P E N D IX D — Issuance o f Staff
Interpretations
O fficial S ta ff Interpretations
Officials in the Board’s Division of Consumer
and Community Affairs are authorized to issue
official staff interpretations of this regulation.
These interpretations provide the protection
afforded under section 706(e) of the act. Ex
cept in unusual circumstances, such interpreta
tions will not be issued separately but will be
incorporated in an official commentary to the
reg u latio n ,
w hich
will
be
am ended
periodically.
Requests fo r Issuance o f Official S taff
Interpretations
A request for an official staff interpretation
should be in writing and addressed to the Di
rector, Division of Consumer and Community
Affairs, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551. The
request should contain a complete statement
of all relevant facts concerning the issue, in
cluding copies of all pertinent documents.
Scope o f Interpretations
No staff interpretations will be issued approv
ing creditors’ forms or statements. This re
striction does not apply to forms or statements
whose use is required or sanctioned by a gov
ernment agency.
Equal Credit Opportunity Act
15 USC 1691; as added by Pub. L. 93-495, Title V, 88 Stat. 1521 (October 28, 1974)
P U B L IC LAW 9 3 -4 9 5 , TITLE V
Section
502 Findings and purpose
503 Amendment to the Consumer Credit
Protection Act
704A Incentives for self-testing and
self-correction
705
Relation to State laws
706
Civil liability
707
Annual reports to Congress
708
Effective date
709
Short title
SE C T IO N 5 02 — Findings and Purpose
The Congress finds that there is a need to
insure that the various financial institutions
and other firms engaged in the extensions of
credit exercise their responsibility to make
credit available with fairness, impartiality, and
without discrimination on the basis of sex or
marital status. Economic stabilization would
be enhanced and competition among the vari
ous financial institutions and other firms en
gaged in the extension of credit would be
strengthened by an absence of discrimination
on the basis of sex or marital status, as well
as by the informed use of credit which Con
gress has heretofore sought to promote. It is
the purpose of this Act to require that finan
cial institutions and other firms engaged in the
extension of credit make that credit equally
available to all creditworthy customers with
out regard to sex or marital status.
[15 USC 1691 note.]
S E C T IO N 5 03 — A m endm ent to the
C onsum er Credit Protection A ct
The Consumer Credit Protection Act (Public
Law 90-321) is amended by adding at the end
thereof a new title VII;
TITLE VII— E Q U A L C REDIT
OPPO R TUN ITY
Section
701
Prohibited discrimination; reasons for
adverse action
702
Definitions
703
Regulations
704
Administrative enforcement
S E C T IO N 7 0 1 — Prohibited
D iscrim ination; R easons for A dverse
A ction
(a) It shall be unlawful for any creditor to
discriminate against any applicant, with re
spect to any aspect o f a credit transaction—
(1) on the basis of race, color, religion, na
tional origin, sex or marital status, or age
(provided the applicant has the capacity to
contract);
(2) because all or part of the applicant’s
income derives from any public assistance
program; or
(3) because the applicant has in good faith
exercised any right under the Consumer
Credit Protection Act.
(b) It shall not constitute discrimination for
purposes of this title for a creditor—
(1) to make an inquiry o f marital status if
such inquiry is for the purpose o f ascertain
ing the creditor’s rights and remedies appli
cable to the particular extension of credit
and not to discriminate in a determination
of creditworthiness;
(2) to make an inquiry of the applicant’s
age or of whether the applicant’s income
derives from any public assistance program
if such inquiry is for the purpose of deter
mining the amount and probable continu
ance o f income levels, credit history, or
other pertinent element of creditworthiness
as provided in regulations of the Board;
(3) to use any empirically derived credit
system which considers age if such system
is demonstrably and statistically sound in
accordance with regulations o f the Board,
except that in the operation o f such system
35
§ 701
the age of an elderly applicant may not be
assigned a negative factor or value; or
(4) to make an inquiry or to consider the
age of an elderly applicant when the age of
such applicant is to be used by the creditor
in the extension of credit in favor of such
applicant.
(c) It is not a violation of this section for a
creditor to refuse to extend credit offered pur
suant to—
(1) any credit assistance program expressly
authorized by law for an economically dis
advantaged class of persons;
(2) any credit assistance program adminis
tered by a nonprofit organization for its
members or an economically disadvantaged
class o f persons; or
(3) any special purpose credit program of
fered by a profitmaking organization to
meet special social needs which meets stan
dards prescribed in regulations by the
Board;
if such refusal is required by or made pursu
ant to such program.
(d) (1) Within thirty days (or such longer rea
sonable time as specified in regulations of
the Board for any class of credit transac
tion) after receipt of a completed applica
tion for credit, a creditor shall notify the
applicant of its action on the application.
(2) Each applicant against whom adverse
action is taken shall be entitled to a state
ment o f reasons for such action from the
creditor. A creditor satisfies this obligation
by—
(A) providing statements of reasons in
writing as a matter of course to appli
cants against whom adverse action is
taken; or
(B) giving written notification o f adverse
action which discloses (i) the applicant’s
right to a statement of reasons within
thirty days after receipt by the creditor of
a request made within sixty days after
such notification, and (ii) the identity of
the person or office from which such
statement may be obtained. Such state
ment may be given orally if the written
notification advises the applicant of his
right to have the statement o f reasons
confirmed in writing on written request.
Equal Credit Opportunity Act
(3) A statement of reasons meets the re
quirements of this section only if it contains
the specific reasons for the adverse action
taken.
(4) Where a creditor has been requested by
a third party to make a specific extension
of credit directly or indirectly to an appli
cant, the notification and statement o f rea
sons required by this subsection may be
made directly by such creditor, or indirectly
through the third party, provided in either
case that the identity of the creditor is dis
closed.
(5) The requirements of paragraph (2), (3),
or (4) may be satisfied by verbal statements
or notifications in the case of any creditor
who did not act on more than 150 applica
tions during the calendar year preceding the
calendar year in which the adverse action is
taken, as determined under regulations of
the Board.
(6) For purposes o f this subsection, the
term “ adverse action” means a denial or
revocation of credit, a change in the terms
of an existing credit arrangement, or a re
fusal to grant credit in substantially the
amount or on substantially the terms re
quested. Such term does not include a re
fusal to extend additional credit under an
existing credit arrangement where the appli
cant is delinquent or otherwise in default,
or where such additional credit would ex
ceed a previously established credit limit.
(e) Each creditor shall promptly furnish an
applicant, upon written request by the appli
cant made within a reasonable period of time
of the application, a copy of the appraisal
report used in connection with the applicant’s
application for a loan that is or would have
been secured by a lien on residential real
property. The creditor may require the appli
cant to reimburse the creditor for the cost of
the appraisal.
[15 USC 1691. As am ended by acts o f March 23, 1976 (90
Stat. 251) and Dec. 19, 1991 (105 Stat. 2306).]
SE C T IO N 70 2— D efinitions
(a) The definitions and rules of construction
set forth in this section are applicable for the
purposes of this title.
Equal Credit Opportunity Act
(b) The term “ applicant” means any person
who applies to a creditor directly for an ex
tension, renewal, or continuation of credit, or
applies to a creditor indirectly by use of an
existing credit plan for an amount exceeding a
previously established credit limit.
(c) The term “ Board” refers to the Board of
Governors of the Federal Reserve System.
(d) The term “ credit” means the right granted
by a creditor to a debtor to defer payment of
debt or to incur debt and defer its payment or
to purchase property or services and defer
payment therefor.
(e) The term “ creditor” means any person
who regularly extends, renews, or continues
credit; any person who regularly arranges for
the extension, renewal, or continuation of
credit; or any assignee of an original creditor
who participates in the decision to extend,
renew, or continue credit.
(f) The term “person” means a natural per
son, a corporation, government or governmen
tal subdivision or agency, trust, estate, partner
ship, cooperative, or association.
(g) Any reference to any requirement imposed
under this title or any provision thereof in
cludes reference to the regulations o f the
Board under this title or the provision thereof
in question.
[15 USC 1691a.]
SE C T IO N 7 03 — R egulations
(a)(1) The Board shall prescribe regulations
to carry out the purposes o f this title. These
regulations may contain but are not limited
to such classifications, differentiation, or
other provision, and may provide for such
adjustments and exceptions for any class of
transactions, as in the judgm ent of the
Board are necessary or proper to effectuate
the purposes of this title, to prevent circum
vention or evasion thereof, or to facilitate
or substantiate compliance therewith.
(2) Such regulations may exempt from the
provisions of this title any class o f transac
tions that are not primarily for personal,
family, or household purposes, or business
§ 703
or commercial loans made available by a
financial institution, except that a particular
type within a class of such transactions may
be exempted if the Board determines, after
making an express finding that the applica
tion of this title or of any provision o f this
title o f such transaction would not contrib
ute substantially to effecting the purposes of
this title.
(3) An exemption granted pursuant to para
graph (2) shall be for no longer than five
years and shall be extended only if the
Board makes a subsequent determination, in
the manner described by such paragraph,
that such exemption remains appropriate.
(4) Pursuant to Board regulations, entities
making business or commercial loans shall
maintain such records or other data relating
to such loans as may be necessary to evi
dence compliance with this subsection or
enforce any action pursuant to the authority
of this Act. In no event shall such records
or data be maintained for a period of less
than one year. The Board shall promulgate
regulations to implement this paragraph in
the manner prescribed by chapter 5 of title
5, United States Code.
(5) The Board shall provide in regulations
that an applicant for a business or commer
cial loan shall be provided a written notice
of such applicant’s right to receive a written
statement of the reasons for the denial of
such loan.
(b) The Board shall establish a Consumer Ad
visory Council to advise and consult with it in
the exercise of its functions under the Con
sumer Credit Protection Act and to advise and
consult with it concerning other consumer re
lated matters it may place before the Council.
In appointing the members of the Council, the
Board shall seek to achieve a fair representa
tion of the interests of creditors and consum
ers. The Council shall meet from time to time
at the call of the Board. Members of the
Council who are not regular full-time employ
ees of the United States shall, while attending
meetings of such Council, be entitled to re
ceive compensation at a rate fixed by the
Board, but not exceeding $100 per day, in
cluding travel time. Such members may be
allowed travel expenses, including transporta
37
§ 703
tion and subsistence, while away from their
homes or regular place of business.
[15 USC 1691b. As amended by acts o f March 23, 1976
(90 Stat. 252) and Oct. 25, 1988 (102 Stat. 2692).]
SECTIO N 704— A dm inistrative
Enforcem ent
(a) Compliance with the requirements im
posed under this title shall be enforced under:
(1) Section 8 of the Federal Deposit Insur
ance Act, in the case of—
(A) national banks, and Federal branches
and Federal agencies of foreign banks, by
the Office o f the Com ptroller of the
Currency;
(B) member banks o f the Federal Re
serve System (other than national banks),
branches and agencies of foreign banks
(other than Federal branches. Federal
agencies, and insured State branches of
foreign banks), commercial lending com
panies owned or controlled by foreign
banks, and organizations operating under
section 25 or 25A of the Federal Reserve
Act, by the Board o f Governors of the
Federal Reserve System; and
(C) banks insured by the Federal Deposit
Insurance Corporation (other than mem
bers of the Federal Reserve System) and
insured State branches of foreign banks,
by the Board of Directors of the Federal
Deposit Insurance Corporation;
(2) Section 8 of the Federal Deposit Insur
ance Act, by the Director of the Office of
Thrift Supervision, in the case of a savings
association the deposits of which are in
sured by the Federal Deposit Insurance
Corporation.
(3) The Federal Credit Union Act, by the
Administrator of the National Credit Union
Administration with respect to any Federal
Credit Union.
(4) The Acts to regulate commerce, by the
Interstate Commerce Commission with re
spect to any common carrier subject to
those Acts.
(5) The Federal Aviation Act of 1958, by
the Secretary of Transportation with respect
to any air carrier or foreign air carrier sub
ject to that Act.
Equal Credit Opportunity Act
(6) The Packers and Stockyards Act, 1921
(except as provided in section 406 of that
Act), by the Secretary of Agriculture with
respect to any activities subject to that Act.
(7) The Farm Credit Act of 1971, by the
Farm Credit Administration with respect to
any Federal land bank, Federal land bank
association, Federal interm ediate credit
bank, and production credit association.
(8) The Securities Exchange Act of 1934,
by the Securities and Exchange Commis
sion with respect to brokers and dealers;
and
(9) The Small Business Investment Act of
1958, by the Small Business Administra
tion, with respect to small business invest
ment companies.
The terms used in paragraph (1) that are not
defined in this title or otherwise defined in
section 3(s) of the Federal Deposit Insurance
Act (12 U.S.C. 1813(s)) shall have the mean
ing given to them in section 1(b) o f the Inter
national Banking Act o f 1978 (12 U.S.C.
3101).
(b) For the purpose of the exercise by any
agency referred to in subsection (a) of its
powers under any Act referred to in that sub
section, a violation of any requirement im
posed under this title shall be deemed to be a
violation of a requirement imposed under that
Act. In addition to its powers under any pro
vision of law specifically referred to in sub
section (a), each of the agencies referred to in
that subsection may exercise for the purpose
of enforcing compliance with any requirement
imposed under this title, any other authority
conferred on it by law. The exercise o f the
authorities of any of the agencies referred to
in subsection (a) for the purpose of enforcing
compliance with any requirement imposed un
der this title shall in no way preclude the
exercise of such authorities for the purpose of
enforcing compliance with any other provision
of law not relating to the prohibition of dis
crimination on the basis of sex or marital sta
tus with respect to any aspect of a credit
transaction.
(c) Except to the extent that enforcement of
the requirements imposed under this title is
specifically committed to some other Govern
ment agency under subsection (a), the Federal
Equal Credit Opportunity Act
Trade Commission shall enforce such require
ments. For the purpose of the exercise by the
Federal Trade Commission of its functions
and powers under the Federal Trade Commis
sion Act, a violation of any requirement im
posed under this title shall be deemed a viola
tion of a requirement imposed under that Act.
All o f the functions and powers of the Federal
Trade Commission under the Federal Trade
Commission Act are available to the Commis
sion to enforce compliance by any person
with the requirements imposed under this title,
irrespective of whether that person is engaged
in commerce or meets any other jurisdictional
tests in the Federal Trade Commission Act,
including the power to enforce any Federal
Reserve Board regulation promulgated under
this title in the same manner as if the viola
tion had been a violation of a Federal Trade
Commission trade regulation rule.
(d) The authority of the Board to issue regu
lations under this title does not impair the
authority o f any other agency designated in
this section to make rules respecting its own
procedures in enforcing compliance with re
quirements imposed under this title.
[15 USC 1691c. As am ended by acts o f March 23, 1976
(90 Stat. 253); Oct. 3, 1984 (98 Stat. 1708); Aug. 9, 1989
(103 Stat. 439); Dec. 19, 1991 (105 Stat. 2300); and Oct.
28, 1992 (106 Stat. 4082).]
SECTIO N 7 0 4 A — Incentives for
Self-T esting and Self-Correction
(a) Privileged information.
(1) A report or result of a self-test (as that
term is defined by regulations of the Board)
shall be considered to be privileged under
paragraph (2) if a creditor—
(A) conducts, or authorizes an indepen
dent third party to conduct, a self-test of
any aspect of a credit transaction by a
creditor, in order to determine the level
or effectiveness of compliance with this
title by the creditor; and
(B) has identified any possible violation
o f this title by the creditor and has taken,
or is taking, appropriate corrective action
to address any such possible violation.
(2) If a creditor meets the conditions speci
fied in subparagraphs (A) and (B) of para
§ 704A
graph (1) with respect to a self-test de
scribed in that paragraph, any report or
results of that self-test—
(A) shall be privileged; and
(B) may not be obtained or used by any
applicant, department, or agency in any—
(i) proceeding or civil action in which
one or more violations of this title are
alleged; or
(ii) examination or investigation relat
ing to compliance with this title.
(b) Results o f self-testing.
(1) No provision of this section may be
construed to prevent an applicant, depart
ment, or agency from obtaining or using a
report or results of any self-test in any pro
ceeding or civil action in which a violation
of this title is alleged, or in any examina
tion or investigation of compliance with this
title if—
(A) the creditor or any person with law
ful access to the report or results—
(i) voluntarily releases or discloses all,
or any part of, the report or results to
the applicant, department, or agency, or
to the general public; or
(ii) refers to or describes the report or
results as a defense to charges o f vio
lations of this title against the creditor
to whom the self-test relates; or
(B) the report or results are sought in
conjunction with an adjudication or ad
mission of a violation of this title for the
sole purpose of determining an appropri
ate penalty or remedy.
(2) Any report or results of a self-test that
are disclosed for the purpose specified in
paragraph (1)(B)—
(A) shall be used only for the particular
proceeding in which the adjudication or
admission referred to in paragraph (1)(B)
is made; and
(B) may not be used in any other action
or proceeding.
(c) Adjudication. An applicant, department, or
agency that challenges a privilege asserted un
der this section may seek a determination of
the existence and application o f that privilege
in—
(1) a court o f competent jurisdiction; or
39
§ 704A
(2) an administrative law proceeding with
appropriate jurisdiction.
(15 USC 1691 c - l. As added by act o f Sept. 30, 1996 (110
Stat. 3009-420).]
SE C T IO N 7 0 5 — Relation to State Laws
(a) A request for the signature of both parties
to a marriage for the purpose o f creating a
valid lien, passing clear title, waiving inchoate
rights to property, or assigning earnings, shall
not constitute discrimination under this title.
Provided, however, That this provision shall
not be construed to permit a creditor to take
sex or marital status into account in connec
tion with the evaluation of creditworthiness of
any applicant.
(b) Consideration or application of State prop
erty laws directly or indirectly affecting cred
itworthiness shall not constitute discrimination
for purposes of this title.
(c) Any provision of State law which prohib
its the separate extension of consumer credit
to each party to a marriage shall not apply in
any case where each party to a marriage vol
untarily applies for separate credit from the
same creditor: Provided, That in any case
where such a State law is so preempted, each
party to the marriage shall be solely respon
sible for the debt so contracted.
(d) When each party to a marriage separately
and voluntarily applies for and obtains sepa
rate credit accounts with the same creditor,
those accounts shall not be aggregated or oth
erwise combined for purposes of determining
permissible finance charges or permissible
loan ceilings under the laws of any State or of
the United States.
(e) Where the same act or omission consti
tutes a violation of this title and of applicable
State law, a person aggrieved by such conduct
may bring a legal action to recover monetary
damages either under this title or under such
State law, but not both. This election of rem
edies shall not apply to court actions in which
the relief sought does not include monetary
damages or to administrative actions.
(f) This title does not annul, alter, or affect,
or exempt any person subject to the provisions
40
Equal Credit Opportunity Act
of this title from complying with, the laws of
any State with respect to credit discrimination,
except to the extent that those laws are incon
sistent with any provision of this title, and
then only to the extent of the inconsistency.
The Board is authorized to determine whether
such inconsistencies exist. The Board may not
determine that any State law is inconsistent
with any provision of this title if the Board
determines that such law gives greater protec
tion to the applicant.
(g) The Board shall by regulation exempt
from the requirements of sections 701 and 702
of this title any class of credit transactions
within any State if it determines that under
the law of that State that class of transactions
is subject to requirements substantially similar
to those imposed under this title or that such
law gives greater protection to the applicant,
and that there is adequate provision for en
forcement. Failure to comply with any re
quirement of such State law in any transaction
so exempted shall constitute a violation of this
title for the purposes of section 706.
[15 USC 169ld. As am ended by act o f March 23, 1976 (90
Stat. 253).]
SE C T IO N 70 6— C ivil Liability
(a) Any creditor who fails to comply with any
requirement imposed under this title shall be
liable to the aggrieved applicant for any actual
damages sustained by such applicant acting
either in an individual capacity or as a mem
ber of a class.
(b) Any creditor, other than a government or
governmental subdivision or agency, who fails
to comply with any requirement imposed un
der this title shall be liable to the aggrieved
applicant for punitive damages in an amount
not greater than $10,000, in addition to any
actual damages provided in subsection (a), ex
cept that in the case of a class action the total
recovery under this subsection shall not ex
ceed the lesser of $500,000 or 1 per centum
of the net worth of the creditor. In determin
ing the amount of such damages in any ac
tion, the court shall consider, among other rel
evant factors, the am ount o f any actual
damages awarded, the frequency and persis
Equal Credit Opportunity Act
tence of failures of compliance by the credi
tor, the resources of the creditor, the number
of persons adversely affected, and the extent
to which the creditor’s failure of compliance
was intentional.
(c) Upon application by an aggrieved appli
cant, the appropriate United States district
court or any other court of competent jurisdic
tion may grant such equitable and declaratory
relief as is necessary to enforce the require
ments imposed under this title.
(d) In the case of any successful action under
subsection (a), (b), or (c), the costs of the
action, together with a reasonable attorney’s
fee as determined by the court, shall be added
to any damages awarded by the court under
such subsection.
(e) No provision o f this title imposing any
liability shall apply to any act done or omitted
in good faith in conformity with any official
rule, regulation, or interpretation thereof by
the Board or in conformity with any interpre
tation or approval by an official or employee
of the Federal Reserve System duly authorized
by the Board to issue such interpretations or
approvals under such procedures as the Board
may prescribe therefor, notwithstanding that
after such act or omission has occurred, such
rule, regulation, interpretation, or approval is
amended, rescinded, or determined by judicial
or other authority to be invalid for any reason.
(f) Any action under this section may be
brought in the appropriate United States dis
trict court without regard to the amount in
controversy, or in any other court of compe
tent jurisdiction. No such action shall be
brought later than two years from the date of
the occurrence of the violation, except that—
(1) whenever any agency having responsi
bility for administrative enforcement under
section 704 com mences an enforcem ent
proceeding within two years from the date
of the occurrence of the violation,
(2) whenever the Attorney General com
mences a civil action under this section
within two years from the date of occur
rence o f the violation,
then any applicant who has been a victim of
the discrimination which is the subject of such
proceeding or civil action may bring an action
§ 706
under this section not later than one year after
the com m encem ent o f that proceeding or
action.
(g) The agencies having responsibility for ad
ministrative enforcement under section 704, if
unable to obtain compliance with section 701,
are authorized to refer the matter to the Attor
ney General with a recommendation that an
appropriate civil action be instituted. Each
agency referred to in paragraphs (1), (2), and
(3) of section 704(a) shall refer the matter to
the Attorney General whenever the agency has
reason to believe that 1 or more creditors has
engaged in a pattern or practice of discourag
ing or denying applications for credit in viola
tion of section 701(a). Each such agency may
refer the matter to the Attorney General when
ever the agency has reason to believe that 1
or more creditors has violated section 701(a).
(h) When a matter is referred to the Attorney
General pursuant to subsection (g), or when
ever he has reason to believe that one or more
creditors are engaged in a pattern or practice
in violation of this title, the Attorney General
may bring a civil action in any appropriate
United States district court for such relief as
may be appropriate, including actual and puni
tive damages and injunctive relief.
(i) No person aggrieved by a violation of this
title and by a violation o f section 805 of the
Civil Rights Act of 1968 shall recover under
this title and section 812 of the Civil Rights
Act of 1968, if such violation is based on the
same transaction.
(j) Nothing in this title shall be construed to
prohibit the discovery of a creditor’s credit
granting standards under appropriate discovery
procedures in the court or agency in which an
action or proceeding is brought.
(k) Notice to HUD o f violations. Whenever
an agency referred to in paragraph (1), (2), or
(3) o f section 704(a)—
(1) has reason to believe, as a result of
receiving a consumer complaint, conducting
a consumer compliance examination, or oth
erwise, that a violation o f this title has
occurred;
(2) has reason to believe that the alleged
41
Equal Credit Opportunity Act
§ 706
violation would be a violation of the Fair
Housing Act; and
(3)
does not refer the matter to the Attor
ney General pursuant to subsection (g),
the agency shall notify the Secretary of Hous
ing and Urban Development of the violation,
and shall notify the applicant that the Secre
tary of Housing and Urban Development has
been notified of the alleged violation and that
remedies for the violation may be available
under the Fair Housing Act.
[15 USC 1691 e. As am ended by acts o f March 23, 1976
(90 Stat. 253) and Dec. 19, 1991 (105 Stat. 2306).]
SE C T IO N 70 7— A nnual Reports to
Congress
Each year, the Board and the Attorney Gen
eral shall, respectively, make reports to the
Congress concerning the administration of
their functions under this title, including such
recommendations as the Board and the Attor
ney General, respectively, deem necessary or
appropriate. In addition, each report of the
Board shall include its assessment of the ex
tent to which compliance with the require
ments o f this title is being achieved, and a
summary of the enforcement actions taken by
each o f the agencies assigned administrative
enforcement responsibilities under section 704.
[15 u se 169If. As added by act o f March 23, 1976 (90
Stat. 255) and am ended by act o f March 31, 1980 (94 Stat.
174).]
SE C T IO N 7 0 8 — E ffective Date
This title takes effect upon the expiration of
one year after the date of its enactment. The
amendments made by the Equal Credit Oppor
tunity Act Amendments of 1976 shall take
effect on the date of enactment thereof and
shall apply to any violation occurring on or
after such date, except that the amendments
made to section 701 of the Equal Credit O p
portunity Act shall take effect 12 months after
the date of enactment.
[15 USC 1691 note.]
SE C T IO N 70 9— Short Title
This title may be cited as the “Equal Credit
Opportunity Act.”
[15 USC 1691 note.]
@FedFRASER